The minutes from the August 7 Fed meeting were released yesterday, showing that Fed heads were feeling a little torn and uncertain about the effect of subprime mortgages on the overall U.S. economy, but expected “a return to normal market conditions” – although it may take a while.
Of course, everything that happened after that is history: Ben Bernanke & Co. cut the discount rate by half a percentage point on August 17… but what they’ll do next is anyone’s guess…and oh, are they guessing.
The majority of those who weigh in on these types of events think that there will be a rate cut (which hasn’t happened since June 2006), but others aren’t so sure. All point to soon-to-be released economic data (on real estate, car sales, etc.), as well as a speech Bernanke is giving tomorrow, to give more clues to what their decision at the September 18 meeting will be…
In other news, we have been hard at work on our documentary, which can be best described as a follow-up to our 2005 book, Empire of Debt.
Over the past few weeks, the whole documentary team has been in awe of how much life is imitating art… that is, how much events in the markets, in the housing and the like are fitting in just perfectly with the points we are aiming to make in our film.
While investors are pulling their hair out, we are grinning with glee… finally, one of our main themes – there is no such thing as a free lunch – is right there in front of us, splashed across the pages of the Wall Street Journal, scrolling across the screen on the MSNBC ticker.
We aren’t the only ones reveling in this bittersweet joy: we assume Sir Alan Greenspan is feeling the same way in recent days, as his memoir The Age of Turbulence hits stores on September 17 (the day before the next FOMC meeting).
Greenspan proves the theory that any press is good press: he is being slammed for causing the credit crunch, while other pundits simultaneously assert that Big Al would be acting much more aggressively in favor of the markets than his successor. We think that the buzz surrounding the Maestro will do nothing but push up his book sales…
The Daily Reckoning Australia