CNBC’s Steve Liesman, however, sees the situation a little differently. He thinks instead of rate cuts the Fed might be looking at creative and different things.
“As far as the Fed is concerned it will expand the liquidity in the market almost infinitely,” says Liesman. In other words the Federal Reserve is a bottomless pit of money. ”One of the things that Fed is trying to do by putting all that liquidity out there is to make banks more comfortable with one another.”
”Also I don’t think investors understand the broad powers of the Treasury which could include direct injection of capital into companies,” Liesman adds. In fact Liesman spoke with Rep. Barney Frank who confirmed the option.
The Bottom Line: Don’t count the Fed short when it comes to distressed assets They have other options aside from lowering rates. They can do reverse auctions, direct purchases of bad assets or the Treasury can go right into companies and inject capital.
We'll be watching.
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Trader disclosure: On Oct.6, 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 (UUP), (MSFT), (WMT), (MCD), (BNI); Pete Najarian Owns (AAPL) And (AAPL) Puts; Pete Najarian Owns (IYR) Put Spread; Pete Najarian Owns (MS) And (MS) Puts; Pete Najarian Owns (RF) And Is Short (RF) Calls; Pete Najarian Owns (GS) Call Spread, (RIMM) Call Spread, (WB) Call Spread, (XLF) Call Spread, (NCC) Call Spread; Pete Najarian Owns (BIIB) Calls; Finerman Owns (GS); Finerman's Firm Owns (MDY), (SPY), (IWM), (MO), (JNJ), (MSFT), (DEO); Finerman's Firm Is Short (BBT), (COF), (IYR), (IJR), (USO), (SPG)
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