The Fed is lowering interest rates and, is trying to hang out the party sign, but by doing so is looking more like a buyer at a garage sale. The banks don't want to party (ie lend, not at those interest rates) but they would like the Fed to buy the basis a lot of slightly used derivatives. Who should we believe? A desperate Fed or a desperate Bank. Well, we should believe they are both desperate. Banks that won't lend to each other, but hang on are'nt depositors lending..... If the Fed thought the population was making that leap, it could be game over.
