Bush Toadie, Ben Bernanke, throws a Hail Mary .... and comes up short

[Stinky The Clown]

That unprecedented .75% rate cut was the Hail Mary. It staved off a stock market loss, for now, but that's about it. The chattering class is already saying it was an act of desperation. The Fed rarely makes rate cuts between meetings, and has never made one of this magnitude. In fact, the very magnitude of the cut was last seen in 1984 - ancient history when you're the Fed and you job is to manage the economy on an ongoing basis.

And now there's talk of an additional .50% cut next week when these financial geniuses meet again.

Alan Greenspan ranks very low on my list of favorite people, but at least he could do the needed triage and life support to smooth out the bumps and keep things in check. To be sure, Greenspan had presidents who relied on him and trusted him .... and more importantly, listened to him. A lot of Greenspan's stuff was very bad for folks like us, but at least he kept the lid on things. Not so with Helicopter Bennie. He's not that bright to start with. Then there's the fact that he works for a moron who can't seem to listen to anyone who knows better. (Even Mike "Arabian Horse" Brown tried to warn the Bush boy that New Orleans really, no shit, **was** drowning.)

And where did this $100B to $150B stimulus package come from? That is, bluntly, farting into the wind. The Republicans *and* the Democrats seem to be selling the same bag of horse turds.

But back to the point. How dumb is Bernanke that he didn't see this coming and was ahead of the curve? Why were things so poorly controlled that the only thing they could do is the Hail Mary? All that did was say to the world "We Don't Have A Fucking Clue What We're Doing." How else can the world react?

One of two things is true.

Either ...... They really have no clue what they're doing.

Or ...... They want it to happen so as to wipe out the middle class once and for all.

If someone just sniffed around a bit, that someone would find all sorts of serious negligence and actual criminal activity. But of course, no one will do that. Surely none of the candidates, at least judging by what they've been saying on 'the trail'.

[Tempest]

1. Same thing happened the last time the Fed cut the rate

The market got a dead cat bounce and kept falling in the next sessions.

[Warpy]

2. Either they're trying to force China to float the Yuan against the dollar

thus instituting double digit inflation they will no longer be able to lie about and killing what's left of the upper middle class and push us all into the serf class, or when China feels backed into a corner and allows the Yuan to float because the dollar's falling faster than it can be made up in the interest they're getting on those loans they've made to us, they're going to be the most surprised group of experts in the world.

My money's on the latter. I really think they have no idea what they're doing beyond propping up a Dow that is still overvalued, even after 7 years of inflation they've been lying about.

The Wall Street Democrats will applaud the rate decreases, of course. The rest of us are going to see higher gas prices later this week, at the latest. With every rate decrease, the dollar drops and the inflation they say we don't have goes up another two or three notches.

[Stinky The Clown]

3. I think they'd be happiest if we Boomers just died off like the dinosaurs

We're going to be a HUGE strain on the economy and we won't be all that quiet if we don't get what we want/need.

[Justice Is Comin]

4. So what are home interest loans going to

be now, three percent? Whoo, time to seek out some sub prime swamp dwellers and buy me some houses.

I feel a deja view coming on.

[Stinky The Clown]

5. Mortgages could go down, but inflation - or worse, stagflation - will kill any chances of a 'boom'

Are you old enough to remember the Carter administration when mortgages were at 16% and higher?

Back then everyone had money but inflation was KILLING them.

Today we have no money and dirt low rates. Today poverty is KILLING them.

The economy is fucking toast. Yet, to hear the media, we dodged a bullet today and all is once again well.

[Warpy]

6. Mortgage rates will not likely go down

and it's going to be more and more difficult to obtain a fixed rate loan without at least 20% down and following the old formula that said no more than 33% of your gross income or 50% of your take home pay should go to paying the PITI.

The lending bubble is what has reached its limit. With no more borrowing except on plastic and their net worth in their houses declining, the only thing left is for the consumer to stop consuming anything but necessities and collapse the consumer economy.