My take: There's more to come - bank failures, monoline bailouts, Fannie and Freddie trouble, foreclosures, hundreds of billions of write-offs, job losses, etc.
I'm not sure how many bullets the government and the Fed have left in their guns - but they're unloading the chambers pretty quick right now. Shockingly quick. And yes, it's an election year, so everyone involved is motivated to keep the incumbents in power and the banks from failing.
I think all this does is delay (again) the real pain. Lowering interest rates to below the rate of inflation is what got us the housing bubble. The Fed is doing it again, they seem to never learn.
They can't re-inflate the housing bubble, since they can't force banks to lend and they can't force sheeple to borrow. But they're doing everything they can to create a new bubble somewhere.
What's your take? How are you investing today? Time to catch falling knives?
January 31, 2008
The government and the Fed are throwing in everything they've got in an attempt to halt the financial crash and bank failures. So will it work?
Posted by blogger at 1/31/2008