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FOMC Statement Changes

Wednesday, September 19, 2007 | 06:23 AM

in Credit | Economy | Federal Reserve | Inflation | Real Estate

A few different ways to parse yesterday's FOMC Statement:
(click each for larger view)

Via the WSJ:

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Comments

Moral Hazard R.I.P. We’re all Argentineans now!!! The S&P 500 is up > 10% since August 16!!!

Once again the Fed has intervened for the benefit of the financially reckless, the speculators, and the asset
inflationists at the detriment of savers and the prudent. That’s why the US overconsumes and undersaves.

While stocks exploded in euphoria over the Fed’s 50bp dual rate cuts, discerning operators pondered what
is it that Fed solons see that scares them so much that they voted unanimously for dual 50bp rate cuts with
oil at an all-time high, gold at a 28-year high and the dollar near an all-time low.

Ben has unleashed his helicopters. We were led to believe that Bernanke was an apostle of Walter
Bagehot (“Lombard Street”) and targeted but penalizing relief. We now know that Bernanke is following
Easy Al’s misguided footsteps. Ben, who until yesterday fought diligently to debunk the notion that he is
‘Helicopter Ben’ has given up that fight. Is there a very good reason for such apparent craven action?

Bonds tanked and gold soared on Bernanke’s adoption of the ‘inflate of die’ policy.

The die is cast. The Fed, US solons and other central bankers will risk an inflationary blow up instead of
allowing the system to purge itself of a decade and a half of excesses.

Though the cost of credit has been reduced, only the few will benefit. This is just the latest attempt to
allow the elites and The Street to unload crappy paper on the gullible and the goofy.