Fed Tells Markets: There is No Certainty

So the Federal Reserve did not taper after all, as we know from its mini-bombshell of an announcement on September 18th. Having signaled in May and June that the central bank was likely to pare back its monthly purchases of $85 billion in mortgage and treasury bonds, the bank and its chairman Ben Bernanke essentially said “Never mind,” and decided that now was not the time after all.

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Concern About Overindebted Americans Is Overblown

It's become a mantra: American consumers have been living beyond their means, borrowing promiscuously, and now the bill is coming due. Having nearly drowned in a sea of debt, U.S. consumers must now repair their finances, spend more prudently and recognize the wisdom of past generations: spend only what you earn. But while endlessly repeated by financial gurus, politicians and the media, the belief that American consumers as a whole have been living beyond their means is a myth. Wall Street was massively overextended, but on average, consumers are not.

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Bad Accounting Rules Helped Sink AIG

The decision by the Federal Reserve to loan insurance giant AIG $85 billion in return for as much as 80% ownership of the company is by any measure dramatic. The takeover early last week of Fannie Mae and Freddie Mac represented the culmination of years of intermingling of public and private interests. Even if the intervention was imperative, its scope is startling.

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