9/25/08

After finally arriving in London...

It would seem Im jumping back in after missing the greatest events of summer... I wouldn't dare say history, but that is just of my opinion.

Only a few words, as I am in the middle of orientation still and still not fully organzied, Im half on Vietnam time and Half on America time trying to sleep on UK time.

For the US...

A fed's fund rate cut from a liquidity standpoint makes sense. There is no capital in the markets at all. I spoke with my mom recently, Wachovia literally cut all unsecured loan lending. I don't know what took them so long, but they finally did it and Im sure many other banks will follow suit or have already. though i was surprised to here that some banks are still lending at prime minus... Im sure that won't last long either...

It seems that sentiment will be reigning king for sometime even if fundamentals of the economy picks up... Im sure the economy will certainly pick up before any recovery or bottoming of the financial markets. Which would exemplify that economy does not equal financial markets... though these days this is bloody hard to distinguish with all these governemnt interventions and the Federal Reserve stepping in to " " save " " the financial markets.

Which brings me to my next point, from a historical perspective as the job of the Fed reserve, explicitly a rate cut does not make sense since it is not their job to baby the financial markets, though it would appear that this job has changed with out any written change to the Fed charter.

Which brings me to my last point ( only for the day, as i must leave to orientation soon), from a monetary policy stand point cutting the rate would not make sense as there are only about 4 more possible rate cuts assuming bernake will be cutting at 25 bp intervals. Leaving no more weapons to stave of crisis...

Of course another cut might as well be considered good since the genius's in washington won't be coming up with any better solutions...

- "so about short-selling"
politician: " well aww gee... i guess its bad n all..."