Today should be an interesting one on Wall Street. I am anxious to know how the market will react to the recent Fed rate cut. Normally we see a rate cut stimulating the economy as demand for loans increases to spur economic activity. Except wait a minute, The banks aren’t making loans at any rate. This is a liquidity crisis. It doesn’t matter what the price of the loan is if the bank has no liquidity to make the loan. The rate cut may factor into a long term recovery but don’t expect to see a quick turnaround of the last weeks losses.
Submitted by David Sheives
