Tuesday, December 16, 2008

The Fed Rate and Silly Negroes

You remember that Eddie Murphy White Man sketch on SNL??  Yeah you do.   Among other things he goes to a bank and discovers that white men can borrow money  for free and he and a white bank exec have a laugh at the expense of an African American loan officer.   Well, evidently we're all white men as of today..... Japanese too..... and I don't notice many people laughing.

Free money is the last bullet the Fed has to fire and it's not at all clear that it'll work.  Cheap money was the gas on the fire that became the great sub prime conflagration and typically firefighters don't throw more fuel on a fire.  When you start asking "what'll we do next?" you  get a lot of humming and pulling at the collar.   Its scary to think about how bad this could get and unnerving to observe how few folks see it coming.

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