Does the Fed Know Who the Patsy Is?
This is perplexing. At the same time that analysts are still predicting hundreds of billions of dollars more in losses tied to credit-based securities, it looks like investors' appetite for risk is returning. I don't think there is an obvious conclusion in all this, but certainly a reasonable conclusion is that the Fed has set itself up as a likely bailer outer in the eyes of investors and allowed moral hazard to infect the markets. Is the Fed a soft touch? A call from Bob Rubin here, a Cramer rant there, and scads of post-loosening adulation and I think Wall Street might feel it has a patsy at the poker table. Disturbing indeed, unless of course you are a private equity honcho. More good times are ahead for you.
UPDATE: Yeah, I'd say we have our patsy.
UPDATE: Yeah, I'd say we have our patsy.
posted by Donny Baseball at 1:03 PM
2 Comments:
Very disturbing indeed. Higher taxes from Rangel et al (clueless congress), + low interest rate from the Fed (clueless Fed) = stagflation. Through in the posibility of Giuliani (who might be as flawed as Nixon), or Clinton (whose social agenda could be worse then Johnson's great society), as the next president, you get a toxic mix. Is everyone prepared to go back and revisit the terrible 70s? It is not a pretty picture.
As a Giuliani supporter I am pretty sure that the prospect of him in the Oval Office does not add to my sense of dread. HRC maybe, but even that thought isn't so bad. The biggest amount of damage will almost certainly come from the Fed, then the congress and lastly the Oval Office.
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