Bo Peng

Fed Leaves Markets with a Lack of Closure

With the tremendous moral hazard created by the Fed in haze over the past few months, they've lost the ability to lead. It doesn't really matter much what they did or say now. They've reinforced the Greenspan system of "no risk-taking will take due risk if you're too big to fail" and the bar on "too big to fail" has lowered.

The commodities bubble has already been fueled by the Bernanke Fed. If its burst is not "too big to stop", just wait for the next try. No lesson will be learned and risk taking will soon lever up, until we get really screwed and even the Bernanke Fed can't bail us out.

Macroeconomic Warning Goes Unheeded

With the open scam of understating inflation and thus overstating "real" (my ass) GDP, Fed is effectively USING inflation to fight recession, on paper. The monetary policy has lost its real content and become a number manipulation game.

If one used any reasonable inflation adjustment factor as opposed to the openly scandalous "core (my ass) CPI", GDP growth would have been negative since Q4-07, in line with reality.

But with the current number-gaming, we have and will continue having inflation AND recession without realizing it.

The stupidity is mind boggling.