Replies to post #100 on High-yield/macroeconomics (fka YIELD)

[biomund]

If the Fed drops interest rates it is a result of the employment numbers, weakening economic data coupled with tame inflation.
The long overdue housing correction adjusting price growth to income and other assets is similarly exerting a negative wealth effect on spending. I disagree that a Fed rate drop will bail out the over zealous lenders and overextended buyers. Both of these groups will be part of the corrective process. It will ease some of the pressure on the commercial paper market financing inflated buyouts which in my opinion is most regrettable but all in all a rate reduction is prudent macroeconomic policy.