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-- Posted Wednesday, 17 September 2008 | Digg This Article | Source: GoldSeek.com
Rick’s Picks Wednesday, September 17, 2008 “Phenomenally accurate forecasts” So, now the Fed is using a little reverse psychology, hanging “tough” on interest rates while investors beat the drums for another rate cut. Just this once, we would have to concede that Bernanke & Co. got it right, since a 50-basis-point cut would only have demonstrated to the world the Fed’s powerlessness to affect much of anything besides short covering on Wall Street for a day or two. Given the Fed’s complete lack of success in stimulating a recovery so far, we can be certain that any further easing would have no effect whatsoever on the economy, nor on the eagerness of lenders to lend, or borrowers to borrow.
The central bank belied its new tough-guy act, however, and ultimately its credibility, by backpedaling on a possible bailout of AIG. On Monday, they were going to let AIG sink if Goldman Sachs and Morgan Stanley couldn’t pull together $70 billion in private capital to shore up the floundering insurance company, the world’s largest for commercial and industrial underwriting. But yesterday the Government spun rumors that perhaps it wouldn’t let AIG sink into oblivion after all. What is most surprising about this dog-and-pony show is that the powers that be evidently believed, if only for a day or two, that it was still possible to raise such a sum as $70 billion to salvage the woeful likes of AIG. Six months ago, when there were at least a half-dozen big banks that could at least pretend they were solvent, $10 billion was a big number. Now, they’re all broke and the Fed wants to hit them up for big bucks that wouldn’t even guarantee protection.
Campaign Bantamweights Duke It Out
With economic Armageddon as a backdrop, the candidates have been making what passes for hay with the news anchors. In reality, they look like two ignoramuses duking it out for the bantamweight title of the economic world. Obama’s cut-man, Joe Biden, jumped into the ring yesterday with a jibe about how electing John McCain would be like picking for your surgeon a doctor who’d been convicted of malpractice. McCain accused Obama of using hard times for political gain, which is true enough. But he also lashed out at short-sellers, as though commodity speculators were the cause of our economic troubles. Will either of these guys (we reserve the word “clowns” for those Three Stooges of the economic world: Bernanke, Paulson and Greenspan) ever comprehend that the only economic policy worth trying would be to eliminate the capital gains and alternative minimum taxes, to lower marginal taxes on income, and then to get the hell out of the economic policy business? Fat chance, and oh well. Perhaps by the 2012 election, Ron Paul will have rounded up enough votes to make the point more forcefully.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 17 September 2008 | Digg This Article | Source: GoldSeek.com
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