Last week it was $200B in treasuries to prop up the depressed and teetering mortgage securities market.
Yesterday it was a $30B credit line to enable the Bear Stearns bailout. They're essentially guaranteeing loans for private companies. Should things go south, guess who insures them? (you and me that would be).
I'm really curious what the final cost of all these bailouts will be. On a side note they cut rates again. Nice try but I think the time to do that was last year so they've been playing catch-up. Last year, as Jim Cramer so aptly put it "THEY KNOW NOTHING!!!" when they were so afraid of inflation. Before the millions of people who lost homes, got foreclosed and went bankrupt.
Sorry but Bernanke doesn't impress me much with his wisdom or financial acumen. Then again the fedgov enabled a lot of this with their "home ownership"/'merican dream programs which allowed ridiculous speculation in mortgages the past several years. But the Fed is culpable too, first with their over-reactive low rates in the early 2000s and lately with Bernanke's stubborn inflation watch while real estate and credit markets crumble.
btw - what would really lower rates is an overhaul of FHA rules with the result that banks will reduce the huge rate gap between Tbills and 10 year bond by providing stability in mortgage securities. They're workin on it at least.
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