Why the Fed is Likely to Sit Tight Today

Why can an high school graduate in the Army realize that this was going to happen. Because they lie to us. The Fed new they were going to be in this position. You know how I knew. I LISTENED TO DR. RON PAUL. He has been saying this for 30 years.

Maybe just keeping rates steady IS the equiv. of raising them 0.25/0.50 considering the trend has been to lower them ?

Although this insight isn't germane to this article, I thought - hey I'd post it anyway. My thoughts on oil hitting 140 today are close to how I look at gold. That gold moved SO much today ? I say - that's not gold going up - that's the dollar worth LESS requiring MORE USD to buy the same amount of gold. Same with oil. People are reading oil futures ALLLLLLL wrong. It's not that oil is going up because of demand - Oil 'appears' to be going up because the dollar is becoming worth LESS hopefully not worthless - heh but - that's all- that's how I see it. That's also why I think 0.25 + yesterday would have been a baby step in the right direction. Even a 0.125 perhaps - I mean, why not send out that message that the Fed is on it's job watch of protecting against inflation. Instead ? We now have a stock market that lets oil influence it, and people start thinking 'oh wow, oil is going up, I better buy it now, then I'll sell when it's even higher' yayhoos - all of em all they're REALLY investing in is a belief the dollar will be worth less. It's frustrating to watch - that people actually think they can win shorting the dollar even. What a useless life if you ask me - to short the dollar. That's not what makes world class economies - shorting the currency - what makes world class economies are world class societies that have civil law and civil rights protected, where workers MEAN something more than something that can be chopped off by the thousands (of workers) to make for a better bottom line come quarterly reports. Can ANYONE really SANELY say ? they're MAKING money ? shorting the dollar ? think about it. Oh well - that's all I wanted to convey is - oil and gold aren't going up. They are an index that the dollar is falling. You can also watch the dollar fall in relation to other currencies too I suppose. But it's dangerous to think oil is actually 'going up'. At some point, the dollar will fall to the point, it will become clear that - well- the higher oil gets the less the dollar is worth, at some point, you'll have hyper-inflated oil - where every other part of your lifestyle will be pegged to THAT - including food. At THAT point, people will start jumping the fence to get INTO Mexico.

Good job Ben Bernanke ! shoulda gone 0.25 % I bet you will on Friday or Monday ! a falling dollar makes everything else USELESS. And Paulson and bush have the gaul to come out 'We're FOR a strong dollar' yet - as this article says - they just SIT there Sure - trying to influence the markets by adjusting rates is like the delay in the mars lander from the time instructions are sent - to the time it moves. BUT- 0.25 up would have said "we're reaching for a stronger dollar" futures would have started to recede back to sanity - people going long might panic - knowing, uh oh, dollar is coming back but - even IF it goes up 0.25 % at this point Fed has to now watch what ECB does. How is it ECB cares more about a strong euro than the US Fed cares about a strong US Dollar ? Dow down negative 350+ today Futures on oil is killing everyone - even the airlines - and Bernanke just SITS there - watching the dollar slide - gee. What IS the responsibility of the Fed again ? one of the TWO responsibilities ? I'd say it might be time to forcibly oust Bernanke and bring someone in who isn't afraid to shave off their beard at risk of thinking their character goes with it.

Justin, I only live on this planet. Jupiter has always given off more heat than it absorbs. There is a neat formula in astro-physics that shows relation of mass to size, and Jupiter is pushing it. Some astro-physicists speculate Jupiter will implode and become a sun. Your argument seems to be the 'why' things are warming up. I'll argue petro is just bad to breath all day long, and diesel ? my god ? that's one of the worst things to breath. You seem to be a fan that things are warming up. So, why not just embrace the problem - if it helps ? this is how I distill the nutcases I run into that have to stand fundamentally unmovable on the blatent melting ice causing a rise in sea waters. Look at it this way, don't call it Global Warming, which no one disputes - call it The Melting Ice problem. Either way, you seem to be more involved here with 'why' it's happening. It is entirely possible fossil feuls + A rise in temps for all the planets puts the earth at extra-special risk. Even if it's not man made - it's a problem. Erosion for coastal properties has the insurance industry spooked, last I saw them on c-span. Maybe flood and rise of those 'A flood could happen to you' commercials are a way to bring up yet even more surplus funds for what's coming, who knows. Neither of us are competent probably Justin, to derive an 'absolute' correct answer on 'global warming' I just observe the trends and majority in thinking. I think at some point we have to rely on others intelligence. It's okay to not be right all the time, I'm wrong all the time. If fact ? I'm probably wrong about being wrong as often as I think I'm wrong. I lose in chess, but I win in that I learn how or why I lose. Loss is gain when coupled with a compassion to learn and understand life beyond our capacity to do so. I wasn't aware of solarsphere as a whole rising in temp, I'll certainly check that out for fun, but I do live on Earth, and I do know I'm subject to these climate changes. You can't tell me the ice melting isn't real in Greenland, and you know ? it's not coming back either - 1/2 is gone, just melted away - where'd it all go ? Into the water cycle, into the ocean, changes salinity, changes a lot of things. Maybe Groundhog day here would work, anything different is good ? perhaps not if it's 118 in the shade. Either way, we can prepare for these changes in a decent way - certainly - if the Bush admin 3 weeks ago - and I mean, they're never wrong or late, in their 3 year late climate report states petro fuels DO contribute to higher temperatures ? we should adhere to that right ? At some point, I really do think our children, or childrens children will look back and go 'Yeah, and they actually PAID for the oil too '. Oil is a dirty way to move cars around. Einstein said of nuclear energy 'That's one hell of a way to generate electricity' I think had he had time ? he'd probably join in on petro burning. I'm pro plastics, sure, but to go 'Lookey Leroy, it blows up real good, and just pours out of the earth, just don't wrap your lips around the exhaust it'll kill ya, or don't leave the garage door down, or don't pretend you don't live in a closed biosphere of the planet' is insane. 100 years is enough for oil. I'd re-examine lung cancer - really. I'd re-examine asthma - I'd re-examine health potential in general being denied. forget health care - if you can't even have clean air to breath ? Gee... I hope Exxon is sued by someone clever enough to take the bush climate report and say 'here, see ? right here, says petro exhaust contributes to rising temperatures' You and I BOTH know, petro exhaust is nothing you'd want to leave the baby carrier around eh ? yeah, all of a sudden put THAT way ? perhaps you see my point on petro. But my MAIN point on petro isn't that it causes warming, that's the bush admin saying that. MY main point is that it makes you sick- and unhealthy- and assaults childrens lungs - according to the AMA. You know, that American Medical Association ? oh yeah, I forgot, that organization is just 'a myth' eh Justin ? By the way - go pick up on some antiquity studies or real some Joseph Campbell - and discover a deeper more meaningful use of the word 'myth' while your at it, you mean falsity - the word 'myth' is mis-used MOST of the time. Then again I'm a fan of Ludwig Wittginstein, where he discerned 'The words meaning (in the end) IS it's use'. Either way Justin, clearing this up - the melting ice is real - you can play around with causal factors all day long, it's real though, and needs to be dealt with. NASA just came out (you know, those loser lying phonies who purport 'falsities' about earth and space ? how DARE they promote the earth isn't flat !) and demonstrated that the melting ice coupled with rising temperatures ? are contributing to very powerful storms- and that we can expect much more flooding as a NORM. I've no idea what rock you're living under Justin, you're pretty much - in a Simon and Garfunkle send - an island on this issue - what's to debate - the ice is melting, the floods are getting worse, the sea level IS rising, the temperatures ARE rising - and petro makes you sick AND of course, the bush admin finally concurs that petro burning contributes to rising temperatures - as the majority of earth scientists on the planet. All I hope YOU can see is that - regardless of WHY the temperature is rising - we need to deal with it, and all in all ? I happen to believe and rely on the MAJORITY of the world's leading scientists AND nation states who come forward stating that indeed - burning fossil fuels DO contribute to rising temperatures. For our dialog, you can leave that out and get back on the real melting ice, and how you think we should derive value out of coastal properties before they go under - (go under ? get it ?) I've not idea why you want to play devils advocate on this Justin. It's the ann coulter in ya !

Elizabeth - I hope you don't think I'm going overboard with praise, but your work is truly artistic. I really enjoy your blog, a fan from the Midwest!

Greedom, I just have one question for you. Why have the temperatures been rising on other planets in our solar system? If you give an honest assessment of the whole global warming hoax, who gains to profit from dictating how we live our lives, and the utter hypocrisy of the very people who push this alarmist message, you'd see the truth as clear as day.

(Dr Zoidberg voice of innocent speculation) "Whaaaaahaat ? No new article here today ?" Thinking about the dollar, Paulson and Bush (well I'm sure Paulson passed it onto bush to say) that they support a strong dollar. To me ? As a non-econommist ? non-investor ? solely a software engineer looking in objectively ? I gather futures of food - energy etc, are set by global interests as those are common denominator goods to me. In that I figure the weak dollar will show up in them first. I look at US stocks - MANY us companies, goods and services are NOT global common denominator goods as I will call them. They will not reflect the rest of the world's 'real ability to exploit the weak dollar' unless Abu Dhabi is sitting out there trading like mad every day, slowly taking a piece out of Wall Street. So, my guess is that futures - especially oil (flooding in mid-west SURELY will hit food futures SOMEwhat, but short of corn and soybean, it's estimated it's 5% of the crop (I did the math on the acreage and came up with about 5 billion, so it can't be THAAAAYAT bad on those two futures as being a negative hit coming), show the REAL global economy value of the dollar, the value that's revealed when you DO buy something coming from Euro's with a 1.56 to 1 ratio, or Sterling with about a 2 to 1 ratio. I saw the 3.5% INCREASE in consumer retail spending report in Britain last week, no one believed it. It was supposed to be negative. "I" wager the UK has been buying in America at fire sale prices and the reason consumer spending was apparently up was because it was coming from the US, and off the radar of sales IN the UK, as the formula would otherwise be deriving the 3.5% from. My guess is that the inflated dollar, or devalued dollar has shown its face in commodoties, and in time, WILL reach the stock market - who knows how long it takes for intra-nation state commerce to adjust to its own currency as it's pushed down by the world currencies. I see in Vietnam in the news, they just jumped 1% on their rates, BAM, and instantly - the dollar was hit. People forget, Bernanke doesn't control things anymore, the world does. He can moderate but all in all, the US is like a ship at sea storm tossed by other currency values. USED to be US set market catch price post WW II Bretton Woods - not anymore. Military might is about all that's left in my view with a limp currency, maybe the plan is to push military and hope to be the 'saviour' in that model again. Who knows... That's more poli-sci BUT I do say- I think if the US DOESN'T raise rates - to hedge off ugly inflation, we're going to push what's happened to commodities to the stock market. What does that mean ? Yayhoo's who only see number don't understand, higher priced commodities doesn't mean you get more product, just that you pay more, or get more if selling. Same product, higher cost. That higher cost is- I'm speculating, NOT so much from the speculators ! (so much speculation) But is from the dollar's condition, as the dollar faces inward to the US consumer AND outward to the global currency/money markets. US stocks are not so extroverted - alas my thoughts that we just haven't seen the Less for More pattern show up in the stocks YET. One thing for sure, if the dollar continues to struggle, and doesn't improve - 80's mentality was that GDP will adjust with lowered rates. That's not happening. What does the US export ? Grief ? If anything US is struggling on imports right now, CAFTA, the Texas Corridor for Chinese material goods (those plastic chairs !). so, ignore the dollar and focus on housing ? What's the point ? Houses will just follow too and inflate. IN FACT ! I might say that when Greenspan offered up those low low rates, short of the soon to come indictments for WaMu on housing appraisals - I'd argue that the 30% decline in housing we've seen in the last 2-3 years isn't so much really a decline, but a delayed reaction to the RAISING of rates, where as I'm saying the homes were INFLATED to begin with when they were tossed around as 'if' they were 'investments' of 'stocks'. So many intelligent people I've heard - ok ok - was just Greenspan and Buffett say that homes are NOT stocks, they are not to be traded as if they are. Somewhere when the CDO's showed up on WallStreet - this - well - that's an ENTIRELY different issue - I just wanted to vent my insights on that the weak dollar, if not prioritized to be corrected ? I think will hit stocks next. So, I'm VERY surprised no 0.25 rate hike yesterday. If the dollar is ignored, everything that is evaluated with the dollar will follow its demise, that's my point I guess. Anyone else have any thoughts on that ?

I still say if the Dollar isn't protected, nothing else will be either. And yet ? We sat on not raising yesterday.

Justin- Your financial advice there doesn't pan out either. You state: The Dow will be at 10,000 by the end of this year. Commodities are going to make a huge run. Buy them while they are still cheap. Protect your money before they inflate it’s value away completely. You don't BUY commodities to hold onto for any long term. I'm with Buffett on invest in what you believe in, REAL companies, real people. People who play on commodities are useless to me. Businesses that draw on commodities for resources, A. OK. in my book, that's what makes the world go around. Parasites who say - lookey lookey - I can get in, get out, what is it ? What kind of relationship is that ? Do they act that way in real life with real people ? in and out ? Are they incapable of long term relationships with people ? Can they maintain a friendship ? Probably not. I hope those responsible for jacking up oil commodities learn the zero sum game rule of the universe sooner than later. Artifical stimulation backed on inflation is a volatile game. I sure hope commodity exploits are small time crooks, kept to the loose sociopaths on wall street. If not, we could see some more major players go down on foolish direction of their wealth funds placed into commodities that could never tolerate such an intense pressure to squeeze profits out of them. You can buy oil all you want and push it up, sooner or later you need to sell it. And if you can't when it retreats ? you just woke up to why commodities are NOT anything to derive serious investment profits from. Invest in REAL companies, REAL people, REAL processes. That's my advice. I found it comforting Buffett said ALMOST the same thing this morning on Fox Business. He added of course, don't even WORRY about the money. And you know what ? I agree. He may have a lot of money, but he's wealthy in many other ways. All you offer up is - greed and insolence - Greed on commodities, and insolence in regard to how many thousands of qualified experts around the globe - even supported by THIS administration now, regarding Global Warming. If you can't handle global warming, try replacing it with 'REAL melting ice in Greenland, and REAL rising sea levels, and REAL stronger storms with REAL heavier downpours from REAL extra water added to the water cycle'

Justin, Either way, you have 1/2 of Greenland ice cap GONE. The sea levels are expected to rise 23 feet when it goes in entirety. Ask yourself, what will coastal regions in the US look like. You can call it Global Warming, call it what you want, the melted ice IS real, go look at a satellite photo and compare. I've no idea how you can be in denial about this. That melted water has to go somwhere. JUST last week NASA came out - WashingtinPost started a new forum JUST for this subject matter. NASA announced that all that water entering the water cycle WILL cause more violent storms, heavier downpours - if you ask me ? more lightning. NASA stated we can certainly expect more flooding. Hey, those are just the facts. You offered opinion. I offered facts.

Justin The Bush climate report from 3 weeks ago even states Global Warming is real. What ? Bush is wrong ? They also state petro burning contributes to rising temperatures. I find it suspect this report was 3 years late. I mean, if oil is against our best interests as a nation for health reasons, my, that would make any run on oil it's last. I have other reasons for not being pro-petro. Justin, for one ? Why is it if you close your garage door, you'll die with the car running ? yet ? you can go out on a stagnant air day and burn away, to no regard ? How is it you can have the American Medical Association stating that children who live within 500 yards of a highway have a 2x risk of lifetime asthma ? Pharmceutials are not the answer. I love the commercials, but people don't GET that chances are - the causal factors behind their asthma could be removed, or they could move. Either way Justin, EVEN the Bush admin has come forward pronouncing Global Warming as real. You can stand divided if you want ! lol

The Dow will be at 10,000 by the end of this year. Commodities are going to make a huge run. Buy them while they are still cheap. Protect your money before they inflate it's value away completely. And Greedom, global warming is nothing more than a power grabbing hoax by the bureaucrats. They have everything to gain from creating more taxes, legislating how we live, and stealing from the poor to fatten up thier wallets and the wallets of the campaign financers that got them their seat in Congress for life (barring a serious completely bone headed scandal). Follow the money.

Your writing is superb!

This was a sensible well-written article. The best opinion piece I've read in months. The Fed has created its own long-term problems in favor of short-term solutions. Anyone that has been paying attention knows this but it gets lost now in a new frenzy of finger pointing towards oil speculators and big oil. I watched in amazement as interest rates dropped, the dollar devalued, and oil rose. We need constant reminders like this article being published so that the root cause of the issue is not forgotten. I know I won't!

Our good men in Washington should physically remove in shackles all the "evil doers" and complicit conspirators in Washington, thereby restoring OUR Constitutional republic, free market economics and the rule of law. The ONLY thing crushing world economies and free people everywhere RIGHT NOW is TOTALITARIAN FASCIST GOVERNMENT. WAR IS NEVER GOOD FOR FREEDOM NOR PROSPERITY. THE WAR MACHINE IS THE BIGGEST OIL PIG THE WORLD WILL EVER SEE. WANNA SEE $200 OIL LET THE WARPIG WAR CRIMINALS KEEP THREATNING IRAN, SYRIA, ETC...

If you think I'm off base on that funny, I saw the insurance companies on c-span begging for premium adjustments - why ? they had these maps in hand odd - they all showed coastal areas being flooded and that the homes in these areas were at greater risk MAKES one wonder if Ms MacDonald's comment about these crazy no payments for 5 years mortgages were primarly COASTAL properties. Sounds to me like someone wanted to get something out of them QUICK - remember- Greenland ice is 1/2 gone and melting far far faster than anyone anticipated. 23 feet sea level rise when all melted. Wouldn't YOU look at billions, PROBABLY 1 trillion + in coastal properties ? and say - hey, before these just become WORTHLESS -let's sell them, THEN bundle up the loan products and sell them off to wall street ? Sure seems this is what happened, whether intent was there or not, IF it's primarily coastal. It's worth it probably to go geospatial analysis on the addresses of the actual homes in question that got the 'buy me now' loan deals.

Superdynamite, I agree with your comment except for blaming Bernanke for oil price hikes. The demand from China and India (and growing bigger every year), combined with peak world oil is the large reason for oil price hikes. Loose credit is partially the reason. Matthew Simmon's "Twilight in the Desert" explains his reasons why world oil is peaking. Read it.

Wow This comment isn't really for posting public here But I was watching that video to the right here with Elizabeth MacDonald on the up and coming negative amorts. Something Liz MacDonald said that hit me. I've been wondering what motivated this entire sub prime vulcher land. When she said 'These loans, they started on the coasts' Well - Head of EPA Christie says Cheney came in and told her to hand over all the EPA internal studies showing massive sea level rise, and massive high temps with flooding from stronger storms - she was on PBS for 2 hours on this one eve, very interesting interview. Head of EPA - yeah, says Cheney came in and said, give me all the maps, don't publicize these, and don't say anything without clearing it with me. Now, the bush admin has always taken a strange 'global warming is a myth' stance, even though 3 weeks ago the bush admin climate report FINALLY acknowledges - too late in hind sight - that yes, global warming IS real, that petro emissions contribute- and that yes, coastal flooding is coming. now, when I heard the 'The loans with no money down for 5 years (call them bait loans) were primarily on the COASTS ?' Gee you think someone is trying to cash in on the homes before they get flooded anyway ? is this all really one way to say - 'hey, let's get some value from these homes in the next few years before the EPA's predictions start to show up and these homes will be worthless because of the predicted 23 foot rise from greenlands melted ice ?' makes sense to me. If that's true, that's one helluva story If it's not, it's a waterlogged conspiracy theory ! heh bottom line though, 1/2 the ice in greenland is gone, and bottom line, coastal properties are about to go WAY down in price - as coasts dissapear. Interesting thought if you ask me, cash in before the property is worthless ! how do you do that ? you make it REAL easy, as easy as easy can be to sell those homes, then you sell off the loan product, and hey, you just squeezed some value out of a product that's about to depreciate REAL quick.

Incredible! Great article. Fox has completely dropped the ball on this website. There is no easy way to forward this article to friends, business associates, etc. Also can't click on the author's name to find out more about who she is.

Awe poor Bear Stearns - come margin call day ? they couldn't produce and instead of the Mob coming to 'help them become aware of how soon they need to pay the money back' they got a federalized handout. Gee - what ? if I go broke ? after losing all my money on a margin call ? I can call up the Fed and say "hey, could you come and bail me out ? Could you pay for this ? " That's insane to expect that and yet ? in the US, legally, a corporation attains citizen status in so many ways- I guess a citizen just can't get corporate status. So what is this ? if I LLC myself ? I can go play the stock market - and if I call myself an investment bank ? I too ? can gain access to federal corporate welfare money ? Where is this anti-socialism president these days ? I agree with Tucker Carlson - scarily (no, he's a bright, good guy, I just don't like where he ends up more often than not heh) Bush is a VERY socialistic president, big spending out the wazoo. My favorite is EPA head Christie goes to Kyoto - states 'of course Bush is into reducing co2 emissions' comes back, Cheney and Bush just gave Ken Laye 120 million in cash tax break - before we found out what kind of guy Laye was, FIRES Christie - saying 'you asked everyone BUT bush and cheney on co2 emissions' She responded with 'but, bush campaigned on lowering co2 emissions'... Hmm.. against big government spending eh ? oh well, 1 more year, then it's try and figure out the global fallout from this admin and take a new chance.

Let's not forget - Ed Thorp - the MIT mathematics professor who designed a system to beat BlackJack in Vegas - was ALSO the guy who developed the first hedge fund.

from article: ", the pundits who said a weak dollar would stop the economy from tipping over as it helps multinationals reap more overseas sales, don’t look so prescient after all." Yeah, sales of what ? This mid-west flooding doesn't help either. Should be called the perfect storm ! I watch the Perfect Storm every once in a while for that final wave scene, it beats any horror movie if you ask me - people that watch it stand behind the fishermen. Lately ? I look at it and go 'no, greed is what got them into the mess they were in, they were greedy, they COULD have gone back to land alcoholism at the bar in Gloucester and survived through the winter until next season, taking their losses that they just didn't catch anything PROBABLY do to over fishing anyway, instead ? greed- they just HAD to put their profits before their life - all in all ? we really don't know what happened I suppose - since no one survived. Hopefully there will be some lessons learned from this mess we're in speaking of a gusher of money open to investment banks. That's a strange move. - In fact, giving investment bankers access to borrow money ? is like giving out credit cards entering a casino in vegas - NOT a good idea. You do NOT want to go gambling with credit. Building a new office ? sure - a new home ? sure - placing bets on the stock market ? my god - who in their right mind would give access to borrow for that ?

Oh yeah my thought that led me to thinking AT LEAST 0.25 the airlines. they're going under. Which one is it ? American Airlines ? or is it US Air ? the one with $2 stock. I hear they charge $2 for a bottle of water. They just cut 1800 jobs Yeah, I want to fly on an airline that just cut jobs to save MONEY - right - REAL safe feeling there, further, what ? as I started joking ? do they say ? "Would you like to buy a falling share in this airline at $2 or a bottle of water today for your flight ?" TOPPING it all ? I see this commercial for Qatar airlines- "the only 5 star airline" my god. What's next ? 7 star Dubai airlines ? This Qatar airlines had food that would probably run you $150 a plate. And what's the US get ? shaky crews and $2 bottles of water with $15 carry on + some extra fee just for even standing in line. So, my point is, if Bernanke doesn't reach to save the dollar today - I say - the US airlines will REALLY suffer. Once you lose those, hey, we don't have trains like the 1950's - so, you can watch crazy things start to happen. That's not a proper market analysis term - 'crazy things start to happen' but how else do you put it if airlines start to fold and people can't travel as they used to as much ? Personally ? if I were Bernanke ? I'd go at LEAST 0.5 % 1% would send shivers down the parasites backs - but 0.5 % would send a STRONG signal which would send oil back down to 120 then probably 110 - guessing, another hike would bring it closer to it's norm at $85 - and then there is Exxon saying, the REAL price of oil is about $55 right now. hmm My current argument is - providing the reason rates are kept low right now is to pad real estate - and mortgage problems - is that if the dollar isn't fixed soon ? you're going to have far far bigger problems. Now, on the other hand ? it JUST occurred to me - would NOT a weak dollar encourage other countries to COME to the US to exploit the exchange on their own currency to the dollar ? alas bring jobs ? hmm I never considered that - just what IF the US turned third world, then people would bring jobs here - hmm

Heya there Don Heh - That's what I was going to say ! Really, I'd LIKE to see 1% sooner than later but I think Bernanke would have to be MAD to not move up 0.25 I think Bernanke doesn't want to cause a severe shift - and if he pushes it too high too fast, all the futures exploiters, ok ok, traders will jump ship. I see critical necessity to fix the dollar. It is taking down (er, up actually) futures, it's taking down home prices - and if I understand things right, the only reason Bernanke wouldn't be raising rates is to keep the homeowners happy - in part related to what Elizabeth MacDonald posted here yesterday about the resets starting this year, surely they don't want a nightmare with resets and more foreclosures. I was even thinking today what the cost is for a bank to hold a foreclosed home, I mean, all of a sudden, they have lawncare, I'm presuming taxes (local) etc, AND insurance, before long, it's costing the bank $5k a year probably... and banks don't need any more stress. So, all in all, I say - fix the dollar, all else will follow in suit. Ignore the dollar, and watch things unravel further - as oil climbs, and US gets sold off to countries that are able to exploit a pretty good currency exchange. The Sterling is almost 2 to 1 now, the Euro, sheesh, I remember when that hit 1.59 to one thinking - uh oh. so, yeah, 0.25 would be the SANE choice. I sure hope they do raise the rates, there won't be any housing TO save if the dollar doesn't come back sooner than later.