HAPPY ST PATRICK'S DAY.
Not a large Irish contingent here in Miami. But somehow we believe people in the Bars from South Beach to Homestead will find a reason to drink.
Where will you spend St Patrick's day? What's your favourite bar to hoist a few? And where will Rumpole be????
The Federal Open Market Committee meets today. This is the committee that sets monetary policy for the United States. One problem- Fed Chairman Bernanke has used up most of the bullets in his gun to combat the recession/depression.
In the past, former Fed Chairman Alan (I used to be a Capitalist) Greenspan (an apropos name for today) used to lower the Fed funds rate a quarter point, wring his hands, mumble something unintelligible about keeping an eye on inflation, and the economy would come roaring back.
Now however, the Fed funds rate is approaching zero. Banks, which got us into this mess to begin with, are making billions loaning money at 5% that they are getting for free, and still the economy is contracting and we are losing more than half a million jobs a month.
What to do, oh what to do?
Well, the "experts" are saying the Fed could start buying US Treasuries. That would lower interest rates even more, and free up more money for mortgages, the reckless use of which also got us into this mess to begin with.
When we hear experts and politicians ponder on the ways to get more money into the lending market so people can start getting mortgages again, we have to wonder where these people went to school? Enabling banks to start recklessly lending again, as a way to jump start the economy, is like a cardiologist telling a patient who just had bypass surgery, "we have to get you back on transfats so you can start enjoying eating again."
It's just plain dumb to want to go back to the era of everyone getting any mortgage they want, especially when banks still have close to a trillion dollars of worthless loans on their books.
As they say in Hialeah, "That dog won't hunt."