The Federal Reserve this morning did a big "Mia Copa" and saved the market from crashing this morning. "Whoo Hoo!!!" Thank god they are saving us from the problem they caused. This all could have been avoided if they had kicked to Neutral this month, But instead they and have to switch to Ease Bias. Bernacke thinks being reactive is the way to go, only act when there is clear and convincing evidence. Mother Market, spent the week kicking him in the nuts. Starting with that Europe wouldn't loan our banks money. Followed by our banks not willing to loan out any money. Followed by the threat of our banks not loaning Consumers any money...... It's called a liquidity crunch.
The funny thing is that in 3 moves and 3 months to a slight ease, he could have done the same thing that he is having to do now in one month. Instead of being proactive being reactive is going to kick his ass. And BTW bring on more of the Dreaded inflation he so Fears.... Time to grow up Little Boy.
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