13 replies to this topic

[phineas_gage]

Just wanted to make sure people saw this because US media is not running the story. I think it reflects on the US fed situation and extend some of the issues we discussed yesterday about the meaning behind the themes of Bernanke's speech.

http://www.bloomberg...6...&refer=news

[Jnavin]

...suggesting that Fed chair Bernanke might take the same tack and refuse to lower rates?

[phineas_gage]

...suggesting that Fed chair Bernanke might take the same tack and refuse to lower rates?

Yes, and try to create a fire sale of US financial assets while at the same time giving the world confidence that the dollar is an investable currency.

[NAV]

...suggesting that Fed chair Bernanke might take the same tack and refuse to lower rates?

Yes, and try to create a fire sale of US financial assets while at the same time giving the world confidence that the dollar is an investable currency.

You are making too many assumptions, based on many unknows.

[Jnavin]

NAV, do central banks often coordinate their activities?

[Iblayz]

Sept. 12 (Bloomberg) -- Governor Mervyn King refused to relax the Bank of England's system for money-market lending, rejecting calls to provide commercial banks with more longer-term cash to reduce borrowing costs.

``The provision of such liquidity support undermines the efficient pricing of risk by providing ex-post insurance for risky behavior,'' King said today in written testimony to the U.K. Parliament's Treasury Committee. ``That encourages excessive risk- taking, and sows the seeds of a future financial crisis.''

Regardless of how it is interpreted and whether it means something in relation to the US, it is very refreshing to see integrity from a high level. In this case the integrity expresses itself in the form of a steadfast refusal to bail out stupidity and a firm commitment to "taking the short term pain for the long term gain". I say "bravo'!

[NAV]

NAV, do central banks often coordinate their activities?

Anecdotally, it appears so. But coordinated and synchronous are not one and the same.

[humble1]

well, all this is pretty darn interesting. yesterday's nytimes financial section, WIDELY read by major market participants, touted strongly the idea that a 1/2 point cut is very possible. they based this on a trio of very recent fed folk statements. i suspect yesterday's rally was much about PRICING IN that 1/2 point cut. what a SHOCK it would be if there were none. i believe a 1/4 point cut would be a signficant disappointment, fwiw.

Edited by humble1, 12 September 2007 - 09:22 AM.

[Jnavin]

I believe the point that phineas was making is that the U.S. media is choosing to ignore the story even though it's highly relevant what with London now the financial center of the Western world. It's a "hear no evil" situation here in the States.

[NAV]

I believe the point that phineas was making is that the U.S. media is choosing to ignore the story even though it's highly relevant what with London now the financial center of the Western world.

It's a "hear no evil" situation here in the States.

I have no disagreement there.