The Fed's Latest Rate Cut: The Song Remains the Same

3/18 - "When is the last time we had two dissenters on a Fed rate cut/increase?

Don't get me wrong. I was pulling for a sizable rate cut. But this Fed inability/unwillingness to get ahead of markets on rates is almost as irritating as these make-everyone-happy compromises. Damn academics."

3/19 - "As for the near-zero interest rates, well, we're still 200bp away from zero, and I don't think anybody anticipates that rates will stay this low for years, like they did in Japan."

"So I think all these worries about moral hazard and decades-long economic malaise are overblown. If there is a decades-long economic malaise in the U.S., it will be despite the Fed's best efforts, not because of them."

3/18 - "If you invest in stocks, you may be feeling a bit of relief at the 420 point rise in the Dow today. But if you have a balance on your credit card, don't hold your breath waiting for that rate to fall. Meanwhile, you may sleep more fitfully tonight as the rate cuts weaken the dollar and raise your cost of living."

"Some credit cards have gone down, but some cards have barely budged. For example, Chase Freedom actually increased its rate from 14.24% in September to 15.99% and Discover's Open Road credit card is at 10.99% today, just as it was before the rate cuts in September...If you have a variable rate mortgage that resets later this month, you are in luck. However, if you have a fixed rate mortgage and seek to refinance or you try to get a new mortgage, I would not be too optimistic about getting a steal."

3/18 - "You can have some pretty catastrophic things happen when people start to panic - as far as what happens with money and how all sorts of things can seize up at once. It's really a psychological problem - a spiral of negativity and panic that feeds on itself...We are on the brink. We haven't seen such potentially perilous economic times in a long, long time...Has the Fed been too slow? Yes. It should have cut to below where we are now months ago."

"I think it's still probable we'll have problems that are relatively short-lived (in history's eyes, not ours) and can be overcome. But we are currently in a high risk situation...The best thing to do when you can't understand the world is to try to better understand yourself.

Invest in yourself during times like these. It'll pay off at some point."