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Credit Markets Have Contracted A Hideous Std

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by Zubin Jelveh
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Sep 25 2008 8:16pm EDT

Credit Markets Have 'Contracted a Hideous STD'

It must be a tough spot for Dallas Fed President Richard Fisher. After months of worrying about inflation and five straight FOMC meetings in which he dissented while his counterparts kept rates steady, Fisher finaly gave up his protests last Tuesday and joined the majority in maintaining the fed funds rate at 2 percent.

Well, this must be what happens to inflation hawks during crises:

There is no nice way to say this, so I will be blunt: Our credit markets had contracted a hideous STD--a securitization transmitted disease--for which lowering the funds rate to negative real levels seemed to me to be not only an ineffective treatment, but a palliative and maybe even a stimulus that would only encourage further mischief.

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