To Cut Rates or Not To Cut Rates - That's the Question

By 2:52pm Eastern, the Dow was up nearly a percent, the NASDAQ up a whopping 2.21 percent and the S & P 500 up 1.30 percent.

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All benchmark indexes in Asia and Europe close in the green.
<h3><a href="http://burnickblog.sovereignsociety.com/">You Can’t Always Get What You Want!</a></h3>
          – Burnickblog
"U.S. stock markets appeared somewhat miffed yesterday when the Federal Reserve failed to ride to the rescue and either cut interest rates, which was NOT expected, or at least indicate that they were prepared to do so in the near future, to help ease the Wall Street credit-crunch.
To provide some background; in the aftermath of the unfolding subprime mess, that has in effect “frozen” parts of the U.S. credit markets in recent weeks, a growing chorus on Wall Street has been calling for action by the Fed; or at least soothing words.
In fact, in a very well-publicized rant (perhaps overexposed by now) on CNBC last week, Jim Cramer, TV’s “Mad Money Man” pretty much made a fool of himself saying the Fed had “no idea how bad it is” for his Wall Street buddies that are suffering big hedge fund losses.
<a href="http://sovereignsociety.typepad.com/.shared/image.html?/photos/uncategorized/2007/08/08/cramer1.jpg"><img height="189" alt="Cramer1" src="http://burnickblog.sovereignsociety.com/images/2007/08/08/cramer1.jpg" width="200" border="0" /></a>Of course his predictable prescription to ease Wall Street’s pain was for the Fed to cut interest rates; to be fair, he also indicated this would help millions of Main Street Americans save their homes from foreclosure.
Never mind the fact that the Fed’s easy money policies for so many years are largely responsible for the subprime mess in the first place, more cheap money is always the easy answer — resurrect the “Greenspan put” says Cramer… booyah!"

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