Zeev writes, "Henry, I hope the Fed's are not miscalculating. They may flood the market with liquidity because of the rising "dfear of lending', but if that money finds its way in equities rather then in lending, they will have to fight the liquidity trap from lower interest rate plateau, where, as Japan has shown, it becomes less and less effective."
Bosco writes, "one of the concerns about the looming possibility of recession is that it could be started on Wall Street instead of in the Main Street this time; therefore, by preventing a Wall Street meltdown, the Fed directly or indirectly would also prevent the Main Street meltdown."
Zeev,
I felt exactly as Bosco did, when the rates were cut and the market moved upwards. I am concerned a recession may be started due to the Sept/Oct Mini-melt. Funny, most commentators don't seem to mention this aspect of a recession too much.
Anyway, can you explain again, why you wrote, "I hope the Fed's are not miscalculating." .... I don't quite understand how your argument works? Do you mean you worry investors will move money into equities rather than buying debt?
Thanks,
MikeM(From Florida) |
