Hail the Fed Chief !!

Those of us who follow Wall Street knew that Helicopter Ben, our Federal Reserve Chairman slashed rates by 50 bps yesterday. May all the homeowners, speculators, bankers and debt-dependent companies be saved! Ben Bernanke, in modern term, "made it rain".

Obviously, "inflation risk remains a concern". And as consumer price index came out better than expected today (http://biz.yahoo.com/ap/070919/economy.html?.v=13). We can now all take a breather.

So far, so good? Not to mention the Dow rocketed 300 pts on a single day. Now we are really on a roll!

Whenever you flood the economy with cheap money, you turn the knob a little higher on inflation risk. But didn't they just report that inflation is lower than expected?! Ohh, of course, we don't want to take food and energy into account because they are all too volatile . So forget the fact that lowering interest rate cause the Dollar to tank and causing oil price to trade at $82 a barrel (because oil is quoted in dollar).

"Outside of food and energy, inflation remained well contained as well in August, rising by 0.2 percent. This core inflation rate had been up by just 0.2 percent or 0.1 percent for the past six months"

Lets not remind ourselves that UPS, Fedex and the railroad companies are passing on fuel charges to businesses and individuals alike (raising prices in the case of railroads, charging "fuel surcharges" in UPS/FDX case). And you wonder why Warren Buffett invest in these things? (http://www.usatoday.com/money/industries/2007-08-31-berkshire-railroads_N.htm)

And did Bernanke really "engineer" a "soft landing"? Or is he simply delaying a "hard landing"? (http://money.cnn.com/2005/10/24/news/newsmakers/bernanke/index.htm) Didn't we learn that business cycle would run its course in Economics 101? I sworn that's what my professor has taught me throughout the years.

Booms are always follow by busts. Booms are created by the excess of GREED. Not the excess of cheap money, not the bubble in asset prices, it is GREED that get us. Or shall we use the term "irrational exuberance" coined by our previous Fed Chairman ? Do I have to remind you of 1998 and what happened follow in March 2000? Or the go-go Golden 20's that followed by the "Great Depression" in 1930s?

As a SMALL stockholders of many corporations, I'm all for the interest rate cut, which give a nice boost to my asset value and make me content about holding EQUITY. But with all the problems surfacing in the face of the economy (housing anyone?http://biz.yahoo.com/ap/070919/housing_construction.html?.v=3), it has me worry. And I'm not saying a recession is coming soon, but it will surface, when the time is right.