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| I agree as well.
However, the time to fix this was 3+ years ago.
The only option now is containment.
I'm guessing the Fed will cut by at least another 50 basis points ..
as they have placed themselves in a box regarding the discount rate
and the new auctions being run.
Yesterdays 30 billion deal was over subscribed 1.25 to 1 and the rate was 3.123 %
If that stands, then that should also be near the FF rate,
therefore the fed funds rate needs to be in the 3.00 range.
bringing the discount rate to 3.50 ..
or there is no 'penalty' to use the window.
so the 3/4 cut brought the FF rate to 3.50 .. the discount rate to 4.00
another .50 drop will brings things in line ..
http://afp.google.com/article/ALeqM5ixPZXiJtY5obnBHwh0Q-DViiKpdA
Hold off on any new loans ...
the game is on.
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Fed Rate Thoughts
