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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: glenn_a who wrote (90847)	1/27/2008 3:31:08 PM
From: Tommaso	Read Replies (1) \| Respond to of 110194

Too many things are happening too quickly to figure out. The Fed does give the impression that it is reacting emotionally to any drop in international equity markets. It is hard to guess what the Fed will do if and when it becomes evident that confidence in the dollar is eroding even more rapidly than it has so far. Bernanke et al. may well just continue stubbornly cutting rates and keeping them low, the obverse and antithesis of the mistakes that the Fed made in the Great Depression. They have misperceived immdeiate conditions as being sinilar or even identical with 1929. The failure of the Creditanstalt bank in Vienna in 1931, eighteen months after the stock market crash began, seemed to be the beginning of the most serious credit contraction, and apparently the Bernanke Fed fears something similar and is trying to head it off. Here's a good history of what the Fed is afraid of: econ161.berkeley.edu