I don’t have time to say much, but I will say that the Fed’s decision to cut rates 50 basis points was silly. They are pretty much telling the market that they will bail them out when the shit hits the fan from taking on overly risky investments. Although this decision may forestall a recession …
Category Archive: US economics
Permanent link to this article: http://www.tvhe.co.nz/2007/09/19/fed-cuts-rates-to-475/
Sep 14 2007
Has the Fed cut rates without telling anyone
Greg Mankiw noticed that the Fed target is still 5.25%, however the effective rate in August was only 5.02%. This is interesting, in NZ you could not do this as the Bank is willing to release any amount of money for a given interest rate (that is what our OCR target implies), the constraint in …
Permanent link to this article: http://www.tvhe.co.nz/2007/09/14/has-the-fed-cut-rates-without-telling-anyone/
Aug 31 2007
Was Greenspan a big softy
Yves Smith think so. His argument is that, even though we didn’t fully appreciate it at the time, Greenspan really really cared about equity markets. He was scared of them, and he didn’t want to go out there and nail them as much as he should have. By being ‘hostage’ to the equity markets, Greenspan …
Permanent link to this article: http://www.tvhe.co.nz/2007/08/31/was-greenspan-a-big-softy/
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