Spreads
August 30th, 2007 by 
reality
Paul Kasriel points out that spreads have not come in all that much since the fed’s discount rate cut. Turbulence is still very much out there.
Kasriel certainly thinks that Ben will find a way to rationalize a cut. So do I.
Posted in Fixed Income, Paul Kasriel, The Fed | 
August 30th, 2007 at 8:16 am
I enjoyed reading through your blog. Nice layout. Yes, I am 99.99% sure the fed will cut and keep cutting. To me, the only question is if they can continue to inflate the bubble or if it collapses into a deflationary spiral.
August 30th, 2007 at 5:00 pm
Correct me if I’m wrong but doesn’t Inflation + Stagnation = Stagflation (a Fed chairman’s worst nightmare)?
Throw in high oil prices and you’ve got the 70’s and 80’s all over again. I just hope the dollar doesn’t tank as I am in T-bills and CDs (spread amongst several banks).
Which reminds me. The bank failures of the great depression taught my grandparents to spread their money around. I used to think it was a silly practice but now I am doing it :(.