Thursday, January 24, 2008

I'm Coining a New Fed Term -- "Panic Slashing"

Panic Slashing: When the Federal Reserve realizes its economic models are way off and news events expose its public pronouncements of "everything is alright" as complete bunk, the Fed engages in "panic slashing" -- quickly lowering rates to a negative rate of return after adjusting for inflation in the hopes that someone (anyone) will actually start to make consumer loans and to save the markets from those embarrassing things called "losses".