"I think the rate cut was positive. Lower rates certainly beat higher rates," says MKM Partners chief economist Mike Darda on Fast Money. "They’re putting a massive amount in the liquidity in the market. It helps but it doesn’t solve all our problems."
Not everyone thinks that changing interest rates is the best tool for addressing the current crisis. One of those people is celebrated short seller Bill Fleckenstein. He tells us, “The Fed’s operational philosophy seems to be 'we can do no wrong' and they need to shift to 'we can do no harm.'”
Fleckenstein feels when the interest rate is too low it creates bubbles. In essence that’s what happened earlier in the decade with the housing market. “We wind up with excess risk taking and ultimately in a terrible situation,” he says.
Essentially Fleckentein thinks the Fed should not pick interest rates but rather target money supply or credit growth. In a nutshell he says throw out the idea of raising or lowering rates and instead put the emphasis somewhere else entirely.
If you’d like to hear Fleckenstein’s thesis for the way our government should manage capital please watch the video.
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Trader disclosure: On Oct.29 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (WMT), (MCD), (SDS), (UUP); Najarian Owns (BNI) Put Spread; Najarian Owns (INTC) And Is Short (INTC) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (PBR); Najarian Owns (MSFT) And Is Short (MSFT) Calls; Seymour Owns (AAPL), (BAC), (F), (MER)
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