Bernanke: The anti-Robin Hood

[rpannier]

Long ago, the Fed abdicated its responsibility under then-Chairman Alan Greenspan. But now chief Ben Bernanke and the boys at the Fed have taken irresponsibility to a new level, where they have clearly demonstrated that they work for Wall Street -- and when Wall Street says jump, the Fed asks, how high?

I don't quite have the database to research this, but I seriously doubt that we've ever experienced a 10% fed funds rate cut, or discount rate cuts of better than 15%, with the stock market a few percentage points off an all-time high.

snip

Yet the Fed's board members felt the need -- when they knew they were being closely watched and knew they would be telegraphing a message -- to telegraph the following message: We don't care what happens to the dollar or, by extension, the Treasury market. We care only about Wall Street.

Now the dollar will sink, and inflation will almost certainly rise. And though the Fed was able to drive overnight rates lower by 50 basis points, the most important development in the wake of its action was the decrease in the price of longer-term Treasurys, as rates out 10 years and longer rose over 25 basis points over the next three days.

link:
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/BernankeTheAntiRobinHood.aspx