Topic: The Fed's Clogged Plumbing

[Libertas]

http://www.zerohedge.com/news/visualizing-feds-clogged-plumbing



As such, the Fed is likely to react to a sharp, broadbased sell-off in asset prices that foretells of a collapse in confidence. But as the crisis environment fades, we would expect the Fed to be more tolerant of regular volatility in asset markets. Indeed, the threshold for the Fed to react to stock prices — which is not a standard part of the Fed’s economic assessment, but surely is correlated with growth and sentiment — is likely higher today than during the prior few years. Investors should be cautious not to put too high of a strike price on the so-called “Bernanke put.”

I guess the concept of financial Draino has been abandoned long ago...

Neo-Keynesian's!  Pah!