Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

Babylon...

Probably Zeev felt it was such a bearish move for the same reason I did - after telling us how wonderful things were for a long time right up to the rate cut, all of a sudden AG cut rates a full half point, which was not only an admission that things were not going well, but it amounted to an alarm bell of sheer panic. Greenspan had suddenly and very belatedly realized that the enemy was deflation rather than the inflation he had been worried about.

It was too late to turn the aircraft carrier around, and the only tools he had left were not the right ones for the job - even the slower folks on the street have finally begun to understand that rate cuts are ineffective in this economy.

I think the markets would take another rate cut much the same way now. It would be an admission that the "soft spot" Greenspan has been so fond of talking about lately was actually quicksand and we are already about to go under. I think Greenspan now understands that there is little he can do to prevent what is coming, and personally believe he is setting up a fall guy, blaming the recession on "the war" in an effort to deflect blame from where it belongs - himself.

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