My thoughts on last week.

Hi all,

I just thought I would post a few thoughts on this last week, as it was quite wild.

The Fed cuts the discount rate window rate. What this does is allow banks to borrow cheaper. This helps with liquidity in the various markets. While in itself doesn't sound like a bad idea, it is.

This has signalled that the Fed is thinking of "saving the markets". Bailing out people that have showed absolutely no fear of making bad bets, i.e. loans to people who could never pay back, just gives them the green light to repeat this behavior.

Our previous Chairman of the Fed had a bad habit of being "Street Smart", while Bernake tends to be an academic. Greenspan, the previous one, would not hesitate to facillitate this behavior, and here we are. These people NEED to feel the pain. No matter what it does to the economy in the near term.

Because if they don't get the ass-kicking they are asking for, there will be another bubble like this. Who knows what kind, but I can bet there is someone out there that is dreaming it up as I type this out.

This last week just shows that there is a sucker born every minute. Or in this case, millions of them.