Apr 04 2008
Did You Think to Do That?
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There’s a lot of jabber among folks like Vince Farrell and Larry Kudlow, among many others, that the Fed should have opened the discount window to investment banks a long time ago. These pundits - and I’m not making a personal attack here, or implying in any way that I don’t have respect for their views - point to the fact that the discount window wasn’t open to Bear Stearns as the reason they had to be taken over by JP Morgan. And they ask the question why the Fed waited so long.
Why didn’t the Fed open the discount window to investment banks a day earlier? Why didn’t they do it back in August when all this credit stuff started coming to a head? Even better, why didn’t they open it years ago when Glass-Steagall was repealed?
Those are all fair questions. My question to them is did you make that suggestion? I don’t remember any of them coming out and saying the discount window should be opened now. Hindsight is a wonderful thing, ain’t it?
Please don’t pound on someone for not thinking to do something that you didn’t think to do yourself.
Here are some other posts which might interest you:
- Today’s Trading Look-Back - March 20, 2008
- Doing the Treasury bailout without taxpayer money
- The Fed buying notes and bonds concerns me
- Reaction to Lehman and Merrill - Strong, but not overly so
- Today’s Trading Look-Back - May 6, 2008
