Just Kidding!
The market is screaming higher on the Fed emergency plan with four other major central banks to inject more liquidity into global markets.
It smacks of panic, and suggests the Fed is very worried.
Yesterday's witticism, Top 10 Things You May Not Have Known About the FOMC, may need some additional editing.
1.
“Hey, Wall Street: We’re not your Bitch anymore.”
Should be changed to:
1. Please forgive us! We crave your approval!
Wednesday, December 12, 2007 | 09:51 AM | Permalink
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I want to see just how much they've loosened standards for what they'll accept as collateral for these short term fundings. I find that extremely interesting.
Posted by: Florida | Dec 12, 2007 9:54:19 AM
Ben is heading for the prison shower room...
Posted by: lurker | Dec 12, 2007 10:01:41 AM
To understand how controlled our federal government is by private interests, they won't even regulate toys that poison kids with lead because "it would hurt corporate profits to implement the changes" or some other BS.
So if the federal government has no problem poisoning your kids to protect private interests, why is it so surprising that other high-level institutions hurt the public to protect the private?
I think the most dangerous people in the country now are the "free market" nutcases who got us into this economic mess, and into a lot of other messes we probably don't know about. Sensible regulation ain't so bad.
Posted by: GRG | Dec 12, 2007 10:05:34 AM
Dunno. From here these two days look like a very slick operation against the shorts. The Fed hates shorts.
Posted by: Max | Dec 12, 2007 10:06:46 AM
Is the FED becoming desperate?
And why didn't they do this months ago?
Posted by: bucky katt | Dec 12, 2007 10:06:46 AM
Don't Drop the Soap.
Posted by: ryan | Dec 12, 2007 10:07:18 AM
florida-
like we will EVER get any color on that from them. They just opened it up to auto loans on non-operating vehicles. So that Chevy that is sitting in your neighbor's yard?? Well that works too...
Desperation does'nt begin to explain this move.
Ciao
MS
Posted by: michael schumacher | Dec 12, 2007 10:07:50 AM
Bernanke is worse than Greenspan.
At least Greenspan waited for almost 1 year after Nasdaq popped to cut rate.
But Bernanke started cutting rate when market was only like 7% from All Time High.
And Bernanke is chaning centuries of Banking Laws to help his wall street buddies.
Posted by: Sean | Dec 12, 2007 10:07:53 AM
Dunno. From here these two days look like a very slick operation against the shorts. The Fed hates shorts.
Posted by: Max | Dec 12, 2007 10:08:19 AM
I say more like a huge gift for certain people who already knew wtf was going to play out. Remember who's running the country.
Posted by: Bob A | Dec 12, 2007 10:08:33 AM
Barry - I think the fed did a great move yesterday to regain control. I think they are now working on a solution to get LIBOR down to more normal levels, as obviously rate cuts wont do the trick!
http://www.urbandigs.com/2007/12/fed_action_coming_libor_target.html
FFR & 3-MTH LIBOR has a spread of 86 basis points right now! Historical is about 10-12 bsp. Problems in creditville. The fed is probably going to surprise with more actions soon.
Posted by: UrbanDigs | Dec 12, 2007 10:11:31 AM
Wonderful move by the FED. This is better than or equal to a 50 bps rate cut. They make inflation hawks happy with a 25 bp rate cut...then make the liquidity/credit worry warts happy with a coordinated strike.
Barry - please give Ben some credit and a "pat" on the back! This is a well thought out play...it is the best option possible for a smooth landing.
Posted by: mike e. | Dec 12, 2007 10:17:35 AM
Just imagine... what would be like if Ken Lay was running the Federal Reserve...
Posted by: Bob A | Dec 12, 2007 10:21:47 AM
Financial Axis of Evil -- Bush + Paulson + Bernanke
I think these 3 deserve a X-mas praying for their deserved right to HELL!!
Posted by: Sean | Dec 12, 2007 10:23:14 AM
How is this going to help the guy who can't pay his mortgage? What exactly has changed with the sub-prime mess over the last 24 hours?
This is a street corner game of "find the queen" as the cards get shuffled around.
The market is acting like they know where the queen card is and betting heavily.
Posted by: Sam | Dec 12, 2007 10:27:14 AM
Do I understand correctly? the banks have to bid on the money? so they could pay 6%-8% for it?
All these great rates for cash, and all I get is pummled by the S&P
Posted by: Eric Davis | Dec 12, 2007 10:29:27 AM
Barry - please give Ben some credit and a "pat" on the back!
Don't you mean a "put" on the back?
Posted by: Florida | Dec 12, 2007 10:39:36 AM
I tell you who is pissed, people who actually sold stock yesterday.. Those people bent over for the soap.
Posted by: Eric Davis | Dec 12, 2007 10:43:08 AM
Sam --> "How is this going to help the guy who can't pay his mortgage?"
It won't! Thats not the feds job. That person will have to deal with their own problems, and that loan will joins thousands of others that arent being paid, contributing to this mess on wall st as loans were securitized and dispersed to investors.
In the end, if you cant afford your home, you shouldn't have bought in the first place! Thats a personal issue. There are tons of people who fit this bill and time will have to heal this wound.
Posted by: UrbanDigs | Dec 12, 2007 10:45:49 AM
Where can I find a reliable summary of the injections by central bankers. I see tid bits and mentions but no specific numbers...this might prove to be interesting to track the post economic effects (aka PEE).
Posted by: Barley | Dec 12, 2007 10:51:04 AM
This is ugly. It's like breaking up with a girl who treated you like crap for all the right reasons..... and then not being able to live without her and coming crawling back in desperation.
Ick! See my: "Actually, We're Still Your Bitch! Sorry About Yesterday! Oops :)" :
http://www.topgunfp.com/actually-were-still-your-bitch-sorry-about-yesterday-oops/
Posted by: Greg Feirman | Dec 12, 2007 10:53:18 AM
Let's put the TAF Plan in context: the Fed has agreed to lend $40B in two auctions in Dec 07, and another unspecified amount in two more Jan 08 auctions, yet the FHLBs are already lending in excess of $750B to financial institutions.
Bottom line IMO: TAF will help a smidge, that's all. The real pain of deleveraging will continue as collateral values (home prices!) continue to decline and borrowers default on their mortgages. The supply of homes is astronomical and growing, and the demand for them is paltry at best. Why buy now if you know in a year or two prices will be much lower? The cycle is gonna feed on itself, it's not pretty now and it will get worse the longer people choose to forestall the pain.
Posted by: Vega | Dec 12, 2007 10:54:49 AM
Barley,
the fed will email you the open market operations, if you sign up for it. but don't ask me for a URL. Sorry
in other news:
Bears take down 100pts from the bulls... Super bearish.
now we have to play 1490 again, I'm thinking it no longer plays.
Now do we get the rumor that the fed is going to cut another .25
Posted by: Eric Davis | Dec 12, 2007 10:58:36 AM
Barry - are you hoping for a recession?
~~~
BR: I don't hope for anything, except health.
Instead of hope, I try to discern what is actually happening, and make appropriate decisions based on that assessment of reality.
Posted by: bruce | Dec 12, 2007 10:58:56 AM
Papa's got a brand new liquidity vehicle.
Posted by: wally | Dec 12, 2007 11:00:14 AM
