As the Journal announced that Bank of Americawas in advanced talks to buyCountrywide, thrifts have shot up: Countrywideup 52 percent, Washington Mutual up 9 percent, Downey up 6 percent.
Bernanke says the Fed,"stands ready to take substantive additional action." That's about as aggressive as the Fed gets making predictions about rate cuts. Sure sounds like there's a good chance the Fed will cut rates, maybe even 50 basis points. Isn't that what the markets wanted?
It was initially. We got a ton of short covering, volume picked up, and then...it just sort of died. Everyone who wanted in got in, and the rest were not that excited.
That's understandable, because there is a cottage industry of Fed skeptics out there. They have several mantras:
--Fed behind the curve.
--Banks are tightening lending standards, so much relief is not getting to consumers anyway.
--Interest rate cuts will not solve problem.
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