[maica]

The Fed is playing with fire right now. They are, at least in part, responsible for the where the economy is. Greenspan wated to take the wind out of the sails of stock speculators who were running up share prices to obscene levels. So what did he do?...he raised interest rates. That was when I started to lose respect for him, because if he really wanted to just get the day-traders to cool it, he could have raised margin requirements, thus weakening the traders' leverage.

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Worth repeating! I saw it that way as well.

[Orangedog]

I saw it that way as well.

Glad I wasn't the only one. I believe that one day, students of history will look back on this time and wonder "just what the Hell were they thinking?!"

The 800 pound gorilla that the policy makers will not (or cannot) acknowledge is the amount of consumer debt still being carried. One more round of Fed-induced refinancing and that will just about eat up the remaining equity, even based on inflated house valuation. The ones who jumped into variable rate mortgages will be the first to fall when Greenspan has to try to put the inflation monster he is feeding back on a leash.