Recapitalize banks by bond again?(mannfm11)

Recapitalize banks	mannfm11	NEW 1/22/2008 12:14:47 PM
Someonesaid the Fed cut rates to recapitalize the banks. They recapitalizedthe banks back in 1990 by giving the banks that took over bonds inplace of the bad loans, but the bonds were yielding pretty fair rates.They then cut rates giving the bonds a premium. Today, if they did thesame thing, it wouldn't work because rates are rock bottom. Also, theserate changes took place without the Fed and the Fed is actually behindthe curve. Thus, banks can't recapitalize on the back of bonds in lightof low Fed rates. Eventually the world is going to require we have arecession due to inflationary effects of expansion against scarcecommodities. The Fed will either battle inflation or the dollar willcease to exist and the dealers in dollars with it.