Bernanke running out of ammo

A well-worn bit of wisdom from rural America advises one that it is pointless to "close the barn door after the cows have escaped". By participating in yesterday's global round of short-term interest rate cuts, US Federal Reserve chairman Ben Bernanke cannot be said to have been guilty of this offense. Instead, what he has done is to close the barn door after the cows have escaped, been captured down the road by cattle rustlers, then sold, slaughtered and ground up into dog food chunks.

For the 10th time since August, 2007, the Federal Reserve has engineered an interest rate cut in order to counter the spreading effects of the now global financial and credit crisis. With twin 50 basis point cuts in both the Discount Rate, to 1.75%, and the Federal Funds Target Rate, to 1.5%, the Fed has now just about emptied its magazine of possible interest rate cuts.

Yesterday's cuts, coordinated across the globe with the Bank of England, the European Central Bank, the Swiss Central Bank, and the Riksbank of Sweden, with the Bank of China participating independently with cuts of its own, are the latest policy initiatives employed by desperate and besieged world economic officials to contain a truly awesome fire-breathing ogre that goes by the name of deleveraging, a monster that seems to get worse, and more importantly, laugh away all attempts to contain it, with every passing day.

It's only natural to characterize the world financial crisis by what's happening in the world's stockmarkets. Wednesday was one of those days, when from the moment the sun burst across the horizon in the Western Pacific until it waned in New York about 21 hours later, there was nothing but pain and sorrow for those learning the painful lesson that yet another mortal deity constructed of man, in this case the religion of the God of Money, had failed.

http://www.atimes.com/atimes/Global_Economy/JJ10Dj01.html