Tuesday, July 20, 2010

Fed up, is more like it

While I really do not know enough about the topic of abolishing the Fed, they do seem to cause undue volatility despite their mission.

From the news

Federal Reserve Bank of Richmond President Jeffrey Lacker said Thursday that the U.S. is at risk over its sovereign-debt levels and that the newly passed bank-reform legislation could pose challenges for some lenders.

and

The U.S. stock market drew a Tuesday afternoon lift from speculation the Federal Reserve was readying to announce an effort to force banks to lend more.

So the Fed speaks and the market tanks. Then the Fed speaks and the market rebounds.  Yet, when you look at both cases the economy was still in trouble.

3 comments:

MrWave4 said...

Hi Mike,
Your blog is a must read for me on a daily basis. I was wondering what happened to the market last night (being in Australia) & the answer is in your blog. Many Thanks Mate!
Cheers

Quick Takes Pro said...

We love Aussies!

Quick Takes Pro said...

Follow up story

(Headline) Fed back from near death
Bernanke goes to Capitol Hill in a significantly stronger position, after successfully weathering serious threats to the central bank's power and emerging with even more authority.

More authority? That's like giving a drunkard a bigger bottle.