Should Fed Step In To Save Credit Markets?
There is talk on the street about whether or not Bernanke & Company at the fed should jump in and become the savior, or ‘lender of last resort’ to help the credit markets in their time of turmoil. Barry Ritholtz recently criticized Jim Cramer on his blog, The Big Picture, for practically begging the fed to step up and cut the fed funds rate! In my opinion, this would be a drastic mistake and I am not betting on any rate cut by our fed at this time; agreeing with Barry’s ultimate conclusion that its not the fed’s job to bail out speculators and ‘guarantee a one way market’, as he says. The fed meets on Tuesday and I’m betting on no change, with hopefully an adjustment in the issued statement removing the ‘tightening bias’ phrase so that a neutral bias is put in place for future meetings/actions; slow and steady. First Off – Check out the Jim Cramer Madness on CNBC late last week. The blowup happens halfway through the video: The fed’s job is not to bail out bad bets. It is the markets j
