Views on the Fed, Merrill and future for Wall Street investment banks
Views are coming in from across the spectrum as financial world commentators join the markets and try to piece together what the busy weekend on Wall Street will mean for stocks and the shape of the financial services industry.
Thestreet.com’s voluble Jim Cramer declares: “Nobody from the Fed has gotten ahead of this problem.” How can the Federal Reserve not cut interest rates “right now?”
Market strategist Barry Ritholtz, blogging in The Big Picture , says a cut “would be ill advised … Why on earth the FOMC would want to undue any of the work by Treasury with a rate cut? That is the current market bet, that a 25 or even 50 basis cut may occur at tomorrow’s Fed meeting.” The Fed should keep its powder dry, he concludes.
Arnold King at Econlog says he’s thinking about the Fed simply as the “the lender of last resort” today. He adds: “For the stock market, I’d say if it only drops 3 or 4 percent and stays open all day, I would count that as a win.”
Calculated Risk pulled from a transcript from Bank of America’s CEO this morning on his expectation for a tough 2008-2009 in financial services and a key comment from Merrill’s John Thain, that “as we go forward, size is going to matter, so the ability to have a diversified stream of earnings, the ability to maintain high degrees of funding certainty are going to continue to be very important.”
And beyond New York, economics professor Greg Mankiw writes that he gives his introductory lecture at noon today for Harvard students and notes that he’d like to “thank all my friends on Wall Street for doing so much to spark interest in economic issues.”
What’s your view on what the Fed should or shouldn’t do next?