To Raise Or Not To Raise? (December 14, 2015)
. . .
1 “That is the answer.”
2 “They can’t raise it, they can’t maintain it, they can’t lower it. They are not in a stalemate because they are in checkmate.”
1 “Game over?”
. . .
2 “A decision not to decide is a decision. The Fed has been deciding not to decide and has decided to destroy the real economy since at least 2008. If they decide to raise the rate a nominal .125 or .250 percent, they may be able to get away with it. Anything more substantial will tip over this unreal and surreal economy of their contriving. Interest rate derivative swaps will strain, fragile emerging markets will sag and the federal government will be forced to spend more of the budget on interest payments.”
1 “They are said to need to show that they are tough guys and gals who are trying to return to a real economy. They are said to need to establish ‘Wall Street cred’.”
2 “They have no ‘Main Street cred’. At least among the few dozen folks who give a cred.”
. . .
1 “So will they raise the interest rate? Yes or no? If they do, how much? .125? .250?”
2 “The question is not ‘will’ they but ‘should’ they raise the interest rate.”
. . .
1 “A betting pool. There you go. We might as well have fun.”
2 “No they should not. .125 to appear to be doing something. The effective rate now may hover near an average of .100, so they may be able to do something without doing anything.”
1 “Maybe. .250 to feign cred. And then be able to reverse gears.”
2 “See we shall.”
. . .
[See the e-commentary at Interest Rates ‘risin (March 30, 2015).]
Bumper stickers of the week:
“Do. Or do not do. There is no try.” Yoda
What happens when you run out of altitude, airspeed and ideas all at the same time?
Otter: “I think this situation absolutely requires a really futile and stupid gesture be done on somebody’s part.”
Bluto: “We’re just the guys to do it.”
“Animal House” movie (1978)
Fed up yet?
“In life, unlike chess, the game continues after checkmate.” Isaac Asimov
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