Fed Indicates That Fed May Consider Ability To Act When Acting

Posted by Equity Private, Dec 01, 2008, 2:23pm

It almost feels like Greenspan is back.

"Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective," Mr. Bernanke said.

Bernanke: More Rate Cuts 'Certainly Feasible' [The Wall Street Journal]

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Tags: Ben Bernanke, Federal Reserve, Greenspan

Comments

1

Posted by guest, Dec 01, 2008 2:26PM

Actually their putting on an act because they can't be acting seriously.

2

Posted by guest, Dec 01, 2008 2:34PM

The Hell they can't, chrome dome. There is nothing except a lynch mob stopping you "lending" somebody a billion dollars and saying, "We know times are tough, just hit me back with 900 mil in a week and we'll call it even."

Frankly, that would be a lot less dishonest than all this "buying" crap (stocks, assets, debt, whatever) that you know either will never be sold or will, if by some miracle it recovers some significant fraction of its value, get clawed back. (Or just mailed back in a nice package. With a bow, I'd guess. And a tasteful card.) to the sellers.

M

3

Posted by guest, Dec 01, 2008 2:43PM

Of course you can have a NIP (Negative Interest Policy) as the next step after the ZIP (Zero Interest Policy). Switzerland did it back in the '90s to control troublesome cross-border capital flows. You wanted to hold Swiss Francs, it was gonna cost you, bunky.

4

Posted by guest, Dec 01, 2008 3:11PM

"I make my own mistakes," Bernanke explained, adding he doesn't like to repeat someone else's.

5

Posted by NAS Keflavik boi, Dec 01, 2008 3:23PM

"The Bernanke Blankie" - cut rates to ZERO, then hide under the covers and suck your thumb

6

Posted by guest, Dec 01, 2008 9:46PM

The Wall Street Bailout is quickly reaching into the trillions-of-dollars, and many analysts are speculating as to the current running total of the outlays thus far, while other financial experts like John Bogle, the founder of the Vanguard Group, are questioning the legitimacy and impact of the costs to maintain this overly-complicated system even when economic conditions are good.

http://tinyurl.com/6jldft

"That means we lose to the market by, you know, over a half a trillion dollars, year after year after year. And investors have to know about that, because it speaks to a real flaw in our system, where the financial system is consuming an excessive share of the economy’s resources…it turns out the financial sector subtracts value from society."

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