Tuesday, August 21, 2007

It is clear from market action that nothing approaching calm has returned to credit markets.

Even Fed may not save our bacon this time: James Saft

VENDEMIAN, France, August 21 (Reuters) - It will take considerably more than the Federal Reserve's cut in the discount rate, and its likely upcoming move to cut the Federal Funds rate, to pull the market's fat out of the fire. While the Fed was right to cut its discount rate by a half a percent and take other steps to improve liquidity, the factors that scared bankers and money market managers into hiding under their desks haven't gone away.

Posted by chris :-)) @ 12:02 PM (802 views)
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3 thoughts on “It is clear from market action that nothing approaching calm has returned to credit markets.

  • I wonder how many more times the central banks will throw money at this problem before deciding enough is enough.

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  • The markets were working as they should by destroying all the bad investments made in last 10 years and punishing the banks for making such bad loans, then along came the central banks to stop the process by pumping more money in to this Frankenstein monster of a market making it even more warped and bloated. Every time the central banks do this western capitalism looses it’s credability and trust, our creditors to which there are many are getting more and more nervous.

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  • Absolutely correct.

    Can’t resist interfering can they? Wouldnt be the same without prolonging the agony and increasing the pain in the long run.

    The process was working itself out far too smoothly. They might have become redundant so they had to take center stage like the worst self-serving, self-interested , attention-seeking spoilt children they are.

    Watch the currencies and the decisions of those countries with an effective peg or controlled rate. Only so much they can take.

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