Friday, August 17, 2007
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Open market thread
Comment away on the financial markets' latest gyrations. Some background reading: 1) The Fed's statement announcing a lowering of the discount rate. This came with a FOMC statement that said:
Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.This has made the Dow Jones very happy.
Keith Bradsher and Jeremy Peters report that 2007 might create the inverse of what happened in 1997:
In the past, when economic growth has stalled in the rest of the world, the United States has usually been there to pick up the slack. Now that dynamic is reversed.At the same time, Brad Setser observes the paradox of the current liquidity crisis -- despite the fact that it started in the United States, the dollar is still viewed as a safe haven.
Meanwhile, French president Nikolas Sarkozy wants greater G-7 involvement.... which gives me hives for some reason.
UPDATE: The Volokh Conspiracy is on this like white on rice.posted by Dan on 08.17.07 at 09:55 AM
The lions of Wall Street had the party that created this mess, and now they want us common folks to suffer (and pay for) the hangover.posted by: save_the_rustbelt on 08.17.07 at 09:55 AM [permalink]
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