If they cut interest rates, we're in a world of shit. For the past 6 months, the fed has increasingly been (rightly) concerned about inflation - the core rate is still low, but had it's largest annual jump since 1991 this year. What's more - the non-core rate, which includes the things that hit consumers the hardest, has seen it's biggest jump since 1981.
If the fed thinks that the risk of inflation is outweighed by the risk of a meltdown... well... then we might be entering real panic mode.
There's a real danger to increasingly liquidity at such a breakneck speed with so much bad debt still sloshing around, waiting for a fool join in the soaking.
Let's take IA off the board and add it to the Kerry states. Admittedly, there are some Kerry states where Obama may need to play a little defense -- MI and NH, I think, being the only two real worrisome states. I'm not saying WI, PA, and MN aren't worth keeping an eye on, but if McCain snags a Kerry state -- I think it's gotta be MI or NH.... and at least so far as MI, he has an auto industry problem like he does with farmers.
Still - I think Kerry + IA is a reasonable thought.
That puts us at 258.
Paths that make it work?
OH, FL, VA, IN, and MO -- any of those 4 alone flips it (it goes to the House in the case of IN or MO, but Obama wins there).
CO + any other states.... +NV, +NM, +MT.
I still think it's way too early to constrict the map. GA was never gonna happen, but I'm not convinced that NC, MT, ND, IN, or MO should come off the boards.
Hell, the free market zombies are applauding the fed's decision not to bail out Lehman... as if it was an option. We're already all in - the fed is tapped. The Chinese piggy bank isn't interested in covering any more of this bursting bubble.
This crisis doesn't END in the financial sector... It starts there.
The rock has been tossed into the water - we've had a 6 month splash.
Now, we have to brace for the waves.
We have to brace for the already troubled PBGC seeing its pension coverage accelerating, as many portfolios take a mortal hit.
We have to brace for the obvious tightening of capital as companies find it much more difficult to borrow and expand.
We have to brace for the implications of a federal budget that can't afford any more bailouts. There's just nothing left.
Even the core inflation number - which excludes the very things that hitting consumers the hardest - is jumping expectations.
Happy talk is not what's needed -- sober assessments are what is needed.
Do you think it was overzealous oversight and too much regulation that led us to this disaster?
Or - do you think a generation of deregulation chickens are coming home to roost?
Enough of this one-way street free market - where we let Wall Street regulate itself as they build bubbles (and hell, actually encourage them via fed policy) - then this magic guarantee that the free market knows is implicit kicks in when the bubble bursts.
It should be obvious to everyone that the federal government, as proxy for the American taxpayer - isn't going to let the market "correct itself"... and hey, I understand that we can't just let the entire financial sector meltdown entirely. Had we not backed the shitpile Fannie and Freddie accumulated - the housing market would plumb depths we haven't seen in anyone's lifetime.
But the fact is - we're all now owners of this mess. We deserve to have watchdogs taking a closer look and applying a stricter collar to that which we're backing.