The FED Chairman best pull that 100 basis-point lever rather early...
Should have been done last week. Now it is too late. The panic is already here.
Stagflation, here we come!
The credit crisis is a matter of musical chairs, nobody knowing who is holding the bad debt when the music stops. The Fed is keeping the music going by lowering rates so far. Had they popped the credit crisis last summer by doing nothing, those bad credits would be losses already, and we wouldn't be looking at both a recession and crappy dollars. Equity would have taken its proper hit faster, and the dollar and the solid part of the economy wouldn't have to take it in the shorts.
Way to go Bernanke. Protecting Wall Street for 6+ months ended up protecting nobody.