Tuesday, March 22, 2005

Baby Steps From The Fed

Too little too late. The Federal Reserve increased the Fed funds rate as expected. The financial stocks continued their downdraft. Fannie Mae was off another 1.6%; Countrywide Financial dropped 1.14% and General Motors lost .5%, closing down for the fifth straight session.

Real estate markets hardly blinked with the home builders rising slightly, fat and sassy with the fourth quarter returns from KB Homes and Lennar. To them, happiness is the profit in the rear-view mirror.

The Fed is tinkling in the wind. The genie can't be put back in the bottle. What if anything was accomplished today? Greenspan and company created these bubbles and high profile, meaningless "rate hikes" do nothing to absolve them of the pain to come.


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