Here’s a question which I hope the assembled crew can answer (in a civil tone!)
How appropriately or inappropriately has the Fed intervened so far in 2007?
There has been no rate changes this year (despite desperate pleadings). In fact, the Fed hasn’t even changed their operating bias.
They have acknowledged the Housing slowdown, and even noted the credit crunch — although anyone with one eye and half a brain has figured out that their claim of "Containment" is laughable.
The biggest action they have taken was last week’s massive repo repurchases to inject lots of cash into the system. Ironically, its not even 2 years since the reporting of M3 was cancelled — and here we see the biggest difference between M2 & M3 soaring in activity.
Here’s the radical part: When the market set inter-bank rate spikes, what other options does the Fed have but warm up the
What say ye?