Hate to Say I Told You So...

As I predicted a week or so ago, Ben "Santa Claus" Bernanke stepped in to give the desperate boys on Wall Street a little more rum so they can keep their party going. He promised to accept their toxic Mortgage Backed Securities as collateral on 28 day loans. Will it be successful? I doubt it. The next plan will be the so-called nuclear option, the Fed will begin buying MBS's. I expect this to happen, and I expect it will be no more successful than anything else the Fed has tried. As John Law found out in France three centuries ago, you can only keep the party going for so long before it's over. Bernanke can succeed in stretching out the pain longer, by delaying the inevitable.