It is Not About *You*

Why friends don't let friends read the Politico. Why oh why can't we have a better press corps?

Mike Allen writes:

Mike Allen: Bank meltdown wallops campaigns: America’s banking instability could upend the final 50 days of the presidential campaign, with both candidates forced to confront a calamity that has gotten only glancing attention during the first 20 months of the race for the White House.

Red flags about the nation’s economic infrastructure have been popping up at least since the collapse in March of the investment bank Bear Stearns. But neither Sen. John McCain (R-Ariz.) nor Sen. Barack Obama (D-Ill.) has talked in detail about the potential consequences for voters and the government.

Until now, the crisis seemed like a confusing Wall Street story. That all ended with the fast-moving events of Sunday, which The New York Times called “one of the most extraordinary days in Wall Street’s history.” A CNBC special report on Sunday night called it “a complete realignment of Wall Street.” And that was before the extraordinary 9:30 p.m. announcement by the Federal Reserve of new efforts to shore up markets.

So it’s no longer an insider's game. The crisis is now at a tipping point where Wall Street will visibly affect Main Street: Home buyers, consumers and entrepreneurs will have even more trouble getting credit, slowing the nation’s job machinery...

If the Federal Reserve thought that Wall Street would have a big impact on Main Street--a bigger impact than they thought it would have last week--they would have cut interest rates tonight rather than just agreed to accept equities as collateral.

Comments

[christofay]

Don't you worry, the Fed will be cutting rates this week. Will that make you happy? Fed operations.

I remember a post on this blog something along the lines of "6 months after a rate cut housing rebounds." Can you please indicate which rate cut we should start counting from? I am believing that Bernanke is an eunich, boy toy to Wall Street.

[christofay]

Oh, and the Fed isn't patient. It blew out a lot of ammo from its six shooter already which turned out to be blanks. It has to be cautious with the remaining round. Even if it has one. Keep in mind how quickly we have come from the Fed rumor that the next rate move will be up to the expectation the next move will be down, just days. The next rate cut will stop that falling commodity market.

Heck of a job, Bernanke!

[christofay]

Even Dick Fuld's dog might be worth $1 billion at one of the Fed's discount window. Ya never know, Taleb.

With the Fed rate at 5% you either have an infinite number of quarter rate increases or 20 quarter percent rate cuts, 1/2% cuts you have 10.

We are now at 2%, so there's only 4 half-a-percent cuts left. And even Bernanke must have heard the rumors, read the papers, that he has been heavily criticized for the speed of his cuts. As with Paulson he has to be realizing that there is something to the criticism especially in light of how little good his continuous cutting has done. He only has four half-a-percent bullets left before he starts accepting Dick Fuld's dog.