Tuesday, August 14, 2007

Ben's Blunder Blossoms Act II

By not cutting rates, "helicopter" Ben, believes he is showing the markets his mettle. He's just showing intransigence, as the market cries out for permanent liquidity, not to be on the beck and call of the Fed.

So Thornburg mortgage is on the verge of blowing up, as funding gets cut off to this prime lender, and dislocations still abound. Money market problems exist with Sentinel, and the credit rating agencies are sold heavily. In retail, earnings slow at Walmart, and retail sales show bumps on the 15th and 30th of each month, indicating more paycheck to paycheck living.

Fed officials think they have time to act. They don't. Time will only make them look stupid.

And the market will force Ben, and his minions to act.