Fed doing what it always does

The Fed is busy helping out its owners-the Banks that use its discount window. Rate cuts and TAF are only helping out the banks-not the citizen on the street.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a1ctn1Xfq5Do&refer=home

Check out the rates from Bloomberg May 2 2008
Current 1 mth Prior 6 mth Prior

Fed Funds 2.00 2.25 4.50

3 month Libor 2.77 2.70 4.86

5 yr AAA Bk & Fin 4.59 4.30 4.79

10yr AAA Bk 5.56 5.50 5.38

15 yr MTG 5.29 5.29 5.54

30 yr MTG 5.72 5.75 5.91

1 yr ARM 5.90 5.55 5.65


So, despite rate cuts of 250 bps in the FF rate, mortgage rates have not dropped and in fact have gone up. The FED is holding up the banks by taking their crap in repo collateral, but the banks are not lending-Because they have no capital. This charade can go on for a while -Just like Japan. The US consumer needs capital and they are not getting it from the banks-look for credit card balances to increase as the desparation sets in.