Letter To Editor: Greenspan Could Have Warned
The people at CEPR sent a letter to the editor of DailyPress.com. " Public officials like Greenspan could very likely have prevented most of the losses in income, retirement savings and employment that millions of Americans suffered when the (stock) bubble burst simply by explaining it in advance to the public. The same could be said about the current housing bubble."
56 Comments:
Are you kidding? It is the policies of the Federal Reserve that has led to this debt madness and subsequent financial bubbles. Warn the public?! They should warn the public that the Federal Reserve is an inflation machine that is creating financial bubbles throughout the world economies and the final act is a total delfationary collapse.
Or inflationary collapse.
I agree they should warn. The sad thing is that I'm not sure that Greenspan realizes anything is wrong. Either that or he is lying or in denial. Any way you look at it, it is sad.
They could have warned. Converseley, people could act rationally, locking in 30 years of low interest rates. When interest rates are the lowest they've been in 42 years why not lock that gift in? Its the herd mentality of buying in at any price using adjustables and interest onlys that have created artificial demand.
That being said, the last several years have seen a dramatic change in the way debt is financed. The mortgage biz has changed from have to go to a local bank, to a global securitized financial system. To some extent those changes should act to lower the interest rates for mortages on a long term basis, but not to the extent we've seen. Clear the Fed and GSEs have created an easy money environment, but does anybody have any data on how mcuh the securitization of debt has permananently lowered the cost of borrowing funds?
I'd like to know how the low, low spread between the mortgage rates we are seeing and the FED rate can be justified.
How can the risk differential between the US Government and Joe Six Pack be less than 2%. Actually it is even less than that, because one or more institutions takes profit from that 2%.
The 2% risk spread won't be enough when people start defaulting on their mortgages.
Inflationary collapse with percentage of Debt-GDP at close to 400%?...LOL!!
With regard to the Nasdaq Bubble, Uncle Al gave ample warning, 1996: "irrational exhuberance", no one paid attention. For more details: http://naybob.blogspot.com/
2005/04/more-fed-speak-redux.html
Yes, inflation is possible provided the government runs a huge budget deficit (like a trillion dollars/year or 10% of GDP) and the Fed lowers overnight rates to 1% again, regardless of CPI inflation. But is this likely?
Inflation benefits people who are deep in debt. These are the same nobodies who are going to be screwed big-time by the bankruptcy bill which congress is about to pass. Also, inflation benefits the blue states, since this is where the housing bubble (and thus the debt) is concentrated. I really don't think the Republicans are going to destroy the economy with hyperinflation in order to bail out the blue states and the lower-middle class debtors.
Deflation benefits the elderly, who have lots of political clout, since the elderly, as a class, are the big net creditors in our society. Deflation would also drive all sorts of smokestack businesses and city and state governments into bankrupcty. Bankruptcy allows contracts to be renogiated, and so would be a great way for the Republicans to bust the municipal unions and also repudiate the lavish pensions and medical benefits that retired union workers are currently receiving. Bankruptcy of Fannie Mae would also be something the Republicans might welcome, since Fannie Mae has always been mostly a Democrat thing.
I suspect we'll get a big bust to wipe the slate clean with lots of bankruptcies, and just a whiff of CPI deflation that doesn't last long, then the big fiscal deficits and a return to 1% overnight rates in order to get the economy rolling again, with the CPI returning to mild inflation again. I wouldn't count on government bailouts of anyone, including Fannie Mae and Freddie Mac. The long drawn out deflation like in Japan is caused by the refusal of the Japanese to tolerate bankruptcy of big businesses. But look at Enron, Worldcom, etc. The United States has seldom shown an unwillingness to tolerate so-called "restructuring".
Recommendations? Put all your money in T-bills or short-term t-notes (or mutuals funds of the same). The dollar isn't going any lower because the Europeans and Japanese are going to be in much worse shape, and it's way too early for the Chinese currency to be rising significantly.
(Its the herd mentality of buying in at any price using adjustables and interest onlys that have created artificial demand)
You nailed that one anon
(The mortgage biz has changed from have to go to a local bank, to a global securitized financial system)
True and lend to the problem. Many houses you drive by are financed, ultimately, by the Chinese central bank.
(The 2% risk spread won't be enough when people start defaulting on their mortgages)
Agreed, so maybe this will fall apart sooner than later.
Mr. Naybob,
I see your point, but AG is known for his put-you-to-sleep statements, what the public needed was a HELLO that no one seems to be willing to produce...Ben
The main reason the U.S. dollar may not head lower from here is due to a reduction in the demand for foreign goods by U.S. consumers. As the economy continues to weaken, the U.S. trade deficit will shrink due to this reduced demand for foreign goods. Deflation will take hold of the world economies and foreign currencies will weaken as the U.S. dollar strengthens. It does not mean that the U.S. economy is strong if the U.S. dollar strengthens. It means that the necessary deflation that will strangle the economy is correcting the prior Fed-induced debt imbalances. By the way, the Federal reserve is not some bystander sitting by this whole mess. THEY (THE FEDERAL RESERVE) are the impetus for the upcoming debt disaster. THEY (THE FEDERAL RESERVE) were also the impetus to the Nasdaq disaster by flooding the system with liquidity to bail-ou LTCM. You will also see that prior to the 1929 crash, the FEDERAL RESERVE flooded the economy with credit to bail-out Great Britain.
You don't think that Federal Reserve doesn't see that money velocity has been falling off the cliff for several years now? These guys are scared to death of what they have created here....a progression to a severe deflationary environment, debt repudiation and total economic wipeout.
I'll be very happy if the US dollar stays strong and we get deflation. Dunno about the interest rates staying low. I suspect that foreign investors are going to demand a big risk premium. I suspect that the housing bubble will go as long as interest rates are cheap.
How are foreign investors going to demand a higher rate of interest on U.S. Gvt. paper if all other asset classes are collapsing in a worldwide deflation? Treasury rates could collapse as there is very little loan demand and a flight to safety (worldwide). Even 2-3% interest will look good if almost every other asset class is getting pulverized. The point will be to preserve capital. Although, great gains could be made in Treasuries if rates do collapse. Also, rates could collapse and stocks and real estate could collapse also...that is what is called a true deflationary spiral of the economy. The Fed knows this..that is why they lowered rates 13 times, but now they've run out of ammo and the debts are even greater. AGHHH!! There's no way out for these guys!!!
Has anyone considered the possibility that Greenspan will nurse this thing along until he steps down in '06? That way he can leave the mess in the lap of the next Fed Chairman?
Foreign investors have very little to do with long-term interest rates. The carry trade explains everything. Big banks or their hedge fund customers borrow at near the overnight rate (1% last year and 2.75% now) and lend at the long-term rate (about 4.5%). As long as short-term rates remain below the long-term rates, the banks can make a profit on the spread. If the spread is 2% and banks leverage their stockholders equity 10 to 1, then the return on equity would be 20%. Want to know the source of corporate profitability these past few years? There's your answer, given that many of the SP500 are actually banks in disguise. (GM, GE, IBM, etc all make more on financing than manufacturing.) The carry-trade is powerful stuff.
The fed has plenty of ways out of any deflationary mess. interest rates are currently 2.75%. They can be lowered back to 1%. Together with a big budget deficit, that should get the economy rolling again. Not immediately perhaps, but eventually.
I really fail to see anything that the fed has done wrong over the past 10 years. Warnings are just hot air. Everyone on this board is issuing warnings and fools won't listen. Actions are what count, and the fed has done the right thing as far as I'm concerned. If fools want to buy stock in pets.com for some ridiculous price, then it doesn't matter what the fed funds rate is. Raising the overnight feds funds rate to cause high mortgage rates might not stop this housing bubble either, but a high fed funds rate would affect innocent bystanders. Madness must be allowed to run its course.
If you really want to affect public policy, then quit complaining about the Fed and direct your efforts towards ensuring Congress doesn't try to bail out all the real-estate speculators.
(given that many of the SP500 are actually banks in disguise. (GM, GE, IBM, etc all make more on financing than manufacturing.)
Great point. Thx for comment Ben
The Federal Reserve hasn't done anything wrong?! They've been doing something wrong since 1913!Great point...let's get the U.S. Congress to revoke the Federal Reserve's charter. Also, wait a minute....the Federal Reserve can lower to 1%, but the intended result of adding more layers of debt to bail out the U.S. economy from the deflation trap may not work this time around. The Fed can lower all they want, but that doesn't necessarily mean that people are going to continue to borrow and spend to keep the great debt game going. As a matter of fact, the Fed may have to lower to zero this time around to keep the leviathon from drowning in its excesses. You simply can't have a debt as a percentage of GDP at 400%. What next? 500%, 600% 700%...at some point, probably soon, the debt bubble will burst to reconcile this insanity brought about by the actions of the Federal Reserve.
I agree with the last poster. Every time the Fed makes rate artificially low, we end up with debt and speculation. The price we are going to pay is a debt crisis and that is when I think interest rates are going to spike.
It is disturbing that there are people who believe that the Federal Reserve is not culpable for the debt bubble. The point is that the Federal Reserve supports fiscal irresponsibilty. Look at what they did from 2001 going forward. Instead of letting the debt bubble deflate they lowered rates to an absurd level of 1%. If they truly "did nothing wrong in the last 10 years" they would have lowered the Fed Funds rate to no lower than 4% in 01-03' resulting in the necessary reduction in the use of debt and the promotion of savings. Did they do that? No. People think that a 1% Fed Funds rate is normal?
I think AG will make sure the RE party can last at least 6 more months.
"The fed has plenty of ways out of any deflationary mess. interest rates are currently 2.75%. They can be lowered back to 1%. Together with a big budget deficit, that should get the economy rolling again. Not immediately perhaps, but eventually."
The deflationary mess is the result of Federal Reserve policies! So they are going to fix the mess that THEY created?! Doubt it. This statement above demonstrates the incredible complacency and 'heroin-addict' behavior to debt that exists in the U.S. thanks to the outrageous policies of the Federal Reserve. Only a final and total deflationary collapse will end this delusional addiction to debt by the American public.
So what is everyones forecast for the economy (interest rates, dolar value, jobs, inflation/deflation, business purchasing) going forward ?
It seems as though some of you are saying the future involves the Fed trying to float even more money at low interest rates. How can that not end in inflation ? And if it does, shouldn't we be holding hard assets like houses ???
BTW: THe trade deficit was announced this morning. $61B for February. An all time high.
The federal reserve did not force idiots to buy houses for prices way above what would be implied by current rents, using interest only mortgages, etc, etc. The federal reserve did not force idiots to buy dotcom stocks either. The correct way to deal with idiots is to allow them to engage in idiocy to the point where they lose a whole bunch of money. That won't stop them permanently, of course, given human nature, but it will stop them for a while.
The only alternative is to have a nanny state, where the federal reserve arbitrarily decides that it doesn't like the way assets are appreciating and then raises interest rates to stop this in advance. Anyone who thinks this is a good idea, in the long run, should think very carefully about the implications of such an expansion of government intervention in the economy. It ia also worth noting that the Europeans and British, whose central bank charters do allow them fight asset inflation, also have a housing bubble and also had a stock market bubble. That suggests that the problem is not the central banks, but a surge in idiocy on the part of investors. The best way to bring these idiots to their sense is to allow them to lose a lot of money.
I really don't see why people are so upset about the Federal Reserve. The issue is Congress. Provided Congress doesn't try to bail out the idiot speculators, then you people reading this forum have nothing to worry about. Just get your money out of real-estate (unless you live in one of the red states where house prices haven't gone up much), maybe get out of stocks, definitely get out of junk bonds, and hunker down in treasuries until the storm passes.
Someone said 1% interest rates won't cure deflation because the fed can't force people to borrow. That's what big budget deficits are for. The government can do the borrowing and thereby stop the deflation. Once the deflation turns to inflation, the interest rates go back up and the inflation is kept under control. Hopefully, this time around, the idiots won't start a third bubble, but if they do, well then they can lose their shirts a third time. Some people are slow learners.
You are right....the Federal Reserve did not force people to buy overvalued real estate or stocks. However, the Federal Reserve enforced an environment of fiscal irresponsibility by lowering the short-term Fed Funds rate well below the productive capacity of the U.S. economy. This direct manipulation of our credit supply has resulted in a series of asset bubbles that could well now destroy the entire economy in a deflationary slide.
"The federal reserve did not force idiots to buy houses for prices way above what would be implied by current rents, using interest only mortgages, etc, etc. The federal reserve did not force idiots to buy dotcom stocks either. The correct way to deal with idiots is to allow them to engage in idiocy to the point where they lose a whole bunch of money. That won't stop them permanently, of course, given human nature, but it will stop them for a while. "
I agree with a lot of what you said in terms of allowing people to lose a lot of money on speculation. The problem with the Fed is that is exactly what they DIDN'T do. Every time the economy got in hot water, the Fed artificially engineered a "soft-landing" by pumping more liquidity into the system. This is why asset inflation is rampant and also why we are seeing one bubble after another.
So we should be upset with Congress instead of the Federal Reserve. Congress was the entity that created a 'free money' environment by manipulating short-term rates? Would individuals and the banking system be speculating in housing if the short-term Fed Funds rate was lowered to only 4% in the last several years?
Maybe the word irresponsible should refer to the Federal Reserve and the American public.
No, the Federal Reserve is culpable to these asset bubbles. For Pete's sakes
Hi, everyone... let us not be revisionists... in 2001, we were in a deep recession and then 9/11 happened and then we went thru a ton of accounting scandals... bush cut taxes and greenspan drove interest rates down because we were hovering around a depression... they did what they had to do to keep the economy moving... and like the post above implies... if people want to over-pay or speculate, that's their own business... in a capitalistic society, there are financial winners and losers...
(I agree with a lot of what you said in terms of allowing people to lose a lot of money on speculation. The problem with the Fed is that is exactly what they DIDN'T do)
Hello? NASDAQ is still WAY down from its peak. I think a lot of people lost a hell of a lot of money in the stock market collapse. Exactly how did lowering interest rates bail out the dotcom/telecom speculators?
Have you ever thought that what was happening starting in 2000 was a natural consequence of years' of credit excess instituted by the policies of the Federal Reserve? The downturn was necessary to reconcile the U.S. from previous misguided monetray policy.
So starting in 2001, the Federal Reserve and U.S. Gvt. began a battle to defy the deflation of prior credit excesses. Now the levels of debt are far greater and the dangers of deflation even more tantamount than 2001.
The point is that since people are so free to win and lose in housing and stocks as all you folks suggest...then the Gvt. should also be excluded from being able to set monetary policy and allow the REAL free market to operate. How many bubbles would there be then?
Prior to 1913, there was no Federal Reserve and there were lots of bubbles and those bubbles were followed by very deep and long-lasting depressions. The system we have now is much better.
Congress is not entirely responsible for the wave of speculation and asset bubbles we are experiencing. However, they are far more to blame than the Fed, due to the various incentives they've offered for real estate speculation and the way they stood in the way of honest accounting for stock options, and so on. The real issue is what happens when this housing bubble bursts. Does Congress offer a bailout? Like perhaps offering a tax credit for any and all losses related to real-estate investment? This is the sort of thing we need to be on the lookout for.
"Hi, everyone... let us not be revisionists... in 2001, we were in a deep recession and then 9/11 happened and then we went thru a ton of accounting scandals... bush cut taxes and greenspan drove interest rates down because we were hovering around a depression... they did what they had to do to keep the economy moving... and like the post above implies... if people want to over-pay or speculate, that's their own business... in a capitalistic society, there are financial winners and losers..."
They did what they had to do to keep the credit bubble going. A real capitalist society would be one where the Gvt. does not tinker with the economy's monetary system. So you're free to speculate so long as your masters at the Federal Reserve control who the winners and losers are via official interest rate policy.
"Prior to 1913, there was no Federal Reserve and there were lots of bubbles and those bubbles were followed by very deep and long-lasting depressions. The system we have now is much better."
The system we have now isn't better...it's worse. Those depressions in the 19th century were far shorter than the fed-induced nightmare of the 1930's or Japan's experience. They were immmediate retrenchments to unsound financial speculation just as every depression. Today, we have a system where financial excesses can not be removed from the system and is being supported by official gvt./fed actions. The coming depression will be far worse than anything in the 19th century due to the longstanding delay and incredible buildup of unproductive debt levels.
(The system we have now isn't better...it's worse. Those depressions in the 19th century were far shorter than the fed-induced nightmare of the 1930's or Japan's experience.)
Talk about revisionism... Those 19th century depressions were brutal in terms of true suffering and hunger. The 1930's was mild by comparison. The Japanese deflation and the recession the US will soon be entering are jokes in comparison with the 19th century depressions. The reason you don't hear the truth of those 19th century depressions is that no one was recording life among the poor back then. Even Dickens, Zola, etc just scratched the surface.
If the Federal Reserve did not control short-term rates...how much would savers be paid on their savings deposits currently in a free market system? 5%? How much would real estate be worth or the stock market? Would U.S. consumers be net savers instead of debtors?
You get the point? The Federal Reserve is most definately the problem because they directly influence society's financial behavior via control of short-temr interest rates. Thus the reason for the incredible financial imbalances that exist today throughout the U.S. and world economies.
I have to agree with the last post. If short term rates weren't so low, we wouldn't have all the debt and deficit we do. Sure, it propped up the economy in the short term, but now we are going to pay double the price.
You want to know what a free market feels like? Get a felony conviction so you can't get hired by someone else and then give away all your money and then try to start your own business from scratch, 19th century style. You'll find it quite difficult given your lack of starting capital and the fact that most of your energies are being spent trying to find a safe place on the street to sleep at night. It won't help that you stink because there's no where to wash your clothes. And promise me not to cheat by going to the government run shelters for a free meal or shower!
It never ceases to amaze me how these Hard Money Men/Gold Bug/Libertarian/Austrian/Capitalist types are usually the ones who've never tasted the downside of free market capitalism. I'd just love to see them reborn to a poor family in a 19th century coal mining town, explaining to their fellow workers how wonderful it is that there is no government regulation of working conditions. "Maybe the company doesn't pay us much and what they do pay us goes straight to the company store so that we just get deeper and deeper in debt, but at least they pay us in GOLD!"
As for your specific arguments, you need to study conventional economics and understand it before you can criticize it. Reading some layman's foolishness on the internet is no substitute for a sound education.
And BTW I'm indepedently wealthy myself, from a business I started, so it's not like you can accuse me of being some envious poor person or someone with no experience of capitalism.
OK, then let's not make arguments that this is a free market system when in acutality it is a quasi-centrally planned economy.
So by conventional economics that would mean the extensive use of debt to make an economy appear healthy?
How much debt did those coal miners need to surivive in the 19th century?
Sooner or later Americans will be forced to live within their means.
http://www.economist.com/agenda/displayStory.cfm?story_id=3834261
I wonder how the economy will look when instead of accelerated spending due to incurring debt, we have decellerated savings due to paying off debt. That will have to happen some day, right ?
"Hello? NASDAQ is still WAY down from its peak. I think a lot of people lost a hell of a lot of money in the stock market collapse. Exactly how did lowering interest rates bail out the dotcom/telecom speculators?"
The NASDAQ is still down, but the entire economy should have slipped into a major recession/depression after losing this much value in the stock market (think 1929-style). Instead, 2001 turned out to be the mildest recession EVER. What is the reason for this? This is an obvious example of a Fed engineered soft-landing.
The Fed didn't engineer a 'soft-landing' in 2001....they just put the day of reckoning off a few years by the extensive use of debt. Now, the deflationary correction will be even more severe.
i work in new york city... and that recession from 2001-2002 was NOT a short nor mild one... it was deep... spin it however they you'd like...but after 9/11, people around here were really worried that we were falling into a depression...
I'm not trying to minimize any personal trouble that you may have observed during the last recession, but the fact remains that 2001 was the MILDEST recession in the postwar era. There are plenty of reports that confirm this. Here is one:
http://ideas.repec.org/p/nbr/nberwo/8938.html
After the dot-bomb, there should have been a major recession (if not full-blown depression), but 2001 was the recession that wasn't.
In a bubble, high prices are sustained only by the expectation of more high prices. That is what makes a bubble a bubble, prone to bursting.
The reason we cannot expect a soft landing today is that right now people are willing to pay these very high prices only because they expect them to go up even more in the future. Prices can't just level off, because when people no longer expect them to go up, some of them will not want to hold at the high price.
(After the dot-bomb, there should have been a major recession (if not full-blown depression), but 2001 was the recession that wasn't.)
Are you independently wealthy with all of your wealth in treasuries? Because this is the ONLY group of people who benefit from a full-blown depression. (I'm in this group myself but even I don't want a depression because of the impact on my friends.) So what's this business about "should"? If the Fed prevented a depression, well then they deserve a pat on the back. Once the housing bubble busts, it will be time for the Fed to move into action again. And then again if there is another bubble after that. Eventually, the speculators will learn their lesson and then the economy can return to normality.
I wrote something earlier about the danger that Congress might engineer a bailout of the speculators. Now I see that there is another danger. Namely, that one of these Austrian/Libertarian types might get elected and try to abolish the Federal Reserve altogether and restore the gold standard. That would really plunge us into a great depression and make us the laughingstock of the world. Of course, such a regime wouldn't last long, but the regime which followed might be radically left-wing. And there we'd be, like Argentina, alternating between right-wing incompetence and left-wing incompetence and becoming poorer instead of richer as the years went by.
One more thing, since I think there is some misconception as who I mean by speculators. I don't just mean the people buying houses, I also mean the people lending money to these buyers. That is the group I particularly don't want to see bailed out by Congress. Let Fannie Mae and the banks go under. Let the Fannie Mae stock holder's lose everything and let the Fannie Mae bond holders take a big haircut, and let the assets that remain be sold at auction to the highest bidder.
People keep talking about a debt build-up. What's the big problem? The full-faith-and-credit Federal debt is modest by historical standards. The only problem is the private debt, especially the mortgage debt. When the bust comes, all this private debt goes up in smoke and the slate is wiped clean, provided Congress doesn't provide a bailout.
How many times do we have to keep repeating ourselves on this board.....you keep implying that Fed is some kind of innocent bystander to these financial bubbles. The Federal Reserve is a speculator! It was the Federal Reserve's policies that put in place the credit bubble that has now resulted in the subsequent deflationary forces that threaten the world economy. So we should "pat the Fed on their back" for fixing (more like delaying) their own financial disaster that they have created? How will the economy ever return to 'normal' if the Federal Reserve continues to promote reckless speculation and debt levels beyond the productive capacity of the underlying economy?
So when does the game end? Another bubble and another and of course the Federal Reserve has nothing to do with it according to your logic. So when the housing bubble bursts, they will cut short rates to zero and expand the percentage of debt to GDP to 500, 600, 700%. This Federal Reserve and the American public are in for a rude awakening when the debt crisis finally arrives.
The "speculators" will never learn their lesson when they take their cue from an entity that promotes reckless speculation and fiscal irresponsibility.
I agree that some people are slow to learn. We have some examples of that on this very forum...
(The "speculators" will never learn their lesson when they take their cue from an entity that promotes reckless speculation and fiscal irresponsibility.)
The Federal Reserve has been following more or less the same policies ever since WWII, at least. There have been bouts of speculation throughout that period. The mood of the investing public swings from greed to fear and back again periodically.
These mood swings have nothing to do with the Fed, but are simply a natural and healthy tendency of capitalism. People want to get rich, and get-rich-quick initially sounds better than get-rich-slow. People have to learn by experience that get-rich-slow is the better approach. People who already know this have nothing to worry about.
I assume you Austrian/Liberatarians been heaping up savings these past few years? Well, fine, you'll be prepared for the recession that will be coming. If there are lots of bankruptcies, as I anticipate, then you'll be able to redeploy your cash and buy some great assets for a song. Stop whining about "Easy Al/Mr. Magoo" and all these other clichés and start preparing for the buying opportunity of a lifetime.
Just like the stock market bubble of 2000... the fed drove the rates down too low and then left them there for too long...
The Fed isn't expected to raise rates by more than 25 bp for now. About the only question is where will they stop the raises altogether.
http://money.cnn.com/2005/04/12/news/economy/fed_outlook/index.htm
It looks like the housing bubble could inflate for a long time to come yet.
In order to keep the RE party last for at least 6 more months.
I think Fed will try to keep the interest rate between 3% - 3.25% in next 4-5 months, so mortgate
rate can stay at 6% to 6.3%.
That't way AG can walk away before RE bubble burst.
Where can I find data on what percentage of new homes are being purchased with ARM's, and what are current foreclosure rates? Thanks.
Looking at the record of the Federal Reserve's involvement in the U.S. economy, only one thing comes to mind....
Thanks for the memories....
I agree with a lot of the comments on this board about the Fed. The fact is that this "thing" whatever the hell it is, is manipulating our economy in ways that are going to continue to cause severe economic dislocations in the future.
It is interesting that the Fed decided to release their meeting minutes months earlier. Another sign of the Fed's attempt to micromanage the financial markets from falling apart.
One last point, I have noticed that the last 3 auctions for the 3-month t-bill have seen lower yields. It's obvious that the economy is seriously slowing down and these auctions are telling us that the Fed is going to have to pause and start cutting again.
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