On September 18, as Soros said before, after a six-hour closed-door meeting, the Fed announced that it would cut interest rates by 50 basis points, from 5.25 to 4.75.

But no one knows that at the FOMC meeting, there was a dispute between Yan zhòng, and this dispute came not only from differences about the perception of the market, but also from other factors, namely whether there was a leak.

Ben, who succeeded Alan Greenspan as Fed chairman, was born. Bernanke is a delighted fellow, because he has been pampered for a long time, and he does not look close to sixty years old, and his white beard is his signature feature. When he took over as Fed chairman in 2006, he was under tremendous pressure, naturally because his predecessor did a really good job.

Greenspan has had six presidents, sat as chairman of the Federal Reserve for 20 years, and under his rule the United States has experienced two economic booms, avoiding several economic downturns or depressions. Even in some ways, Greenspan has more extensive influence than the president of the United States himself.

Bernanke, who succeeded Greenspan, graduated from Harvard University, received a doctorate from the Massachusetts Institute of Technology, and later became a professor at Stanford University.

Over the past year, it can be said that Bernanke's monetary policy has been decent, and there is nothing brilliant and nothing to blame. But at the FOMC meeting in March '07, there was a subprime mortgage incident against New Century Financial Corporation and HSBC North America. Bernanke didn't take it too seriously, and even said that the U.S. housing market would continue to be strong. And as a member of the decision-making committee, the president of the Federal Reserve Bank of New York. Geithner, who later served as U.S. Treasury Secretary, also declared in August that "there is no indication that large, diversified institutions will experience any financing pressure." ”

On the other hand, other members of the Fed's policymaking committee have expressed enough concerns about the market, including Janet Yellen, the president of the Federal Reserve Bank of San Francisco, who previously warned about the problems in the US housing market and pointed out that the "shadow banking" in the market is getting out of control. This will accelerate the deterioration of financial markets. After pointing out these issues, she actively called for the Fed to take strong measures to deal with the current market situation. Unfortunately, these measures have not been adopted.

Beginning in August, the subprime loan crisis began to spread to the bond, stock and other capital markets, and it was only then that Fed officials began to face up to the problem. But by this time. Most economists within the Fed still believe that. The crisis of subprime mortgages is within a manageable range and will not lead to the same serious consequences as the US economy falling into recession.

In any case, the doves and hawks within the Fed finally reached an agreement to cut interest rates by 50 basis points after this meeting to avoid the risk of a sharp slowdown in economic growth, which could lead to a recession. Although there are many internally who believe that such a rate cut could spur inflation, Bernanke has resisted the pressure.

After the round table finally reached an agreement. The staff began to be busy drafting the announcement statement, although it was discussed for a long time. Everyone was exhausted, but the 12 committee members were not idle, and began to discuss some other things, even market rumors.

"Regarding our discount policy, it has proven to be effective so far. The market didn't seem to anticipate our consideration of a discount rate cut, and this time we finally got ahead of the market. ”

Vice Chairman of the Federal Reserve and President of the Federal Reserve Bank of New York, Timothy Brown. Geithner said with interest. The 46-year-old is a young and energetic representative of the Fed and is considered one of the most likely candidates to succeed Bernanke in the future. A graduate of Johns Hopkins University, he has served four U.S. Treasury secretaries, became president of the Federal Reserve Bank of New York in '03, and is now sitting in the position of vice chairman of the Federal Reserve.

On the 16th of last month, the Federal Reserve decided to cut the discount rate in an emergency video conference, which injected capital and vitality into the market in disguise, coupled with the interest rate reduction policy decided today, the two went hand in hand to promote market liquidity.

Geithner's excitement is justified. The Fed's policy decisions have long been the focus of market attention, and before each FOMC meeting, there are many predictions about what the Fed will do, some of which are outrageously accurate. The direct consequence of this forecast is that the effect of the Fed's policy implementation will be directly discounted, because the market has already made relevant changes due to expectations, and the change of relevant variables will eventually lead the Fed to reflect on or even adjust its policy.

However, policy adjustments that are not predicted in the market can maximize the original intention of these policy decisions and adjust the direction of the market to achieve the goals desired by the Fed.

At the end of the day, it's a game.

But just as Geithner finished speaking, the president of the Federal Reserve Bank of Richmond. Lack immediately frowned and said unceremoniously: "Vice Chairman Geithner, may I ask if what you just said is the case, our consideration of the discount rate, or what we might do, the bank does not know in advance?" ”

Geithner was stunned, didn't understand what the other party meant, and subconsciously replied: "Yes, of course." ”

Seeing that the other party still didn't understand what he meant, Gad. Lack's brows furrowed even tighter, and after thinking for a long time, he said leisurely: "Vice Chairman Geithner, I listened to the president and CEO of Bank of America BOA this afternoon. Lewis, who was clearly grateful for Geithner's change in the way the discounting tool was made. It seems that the information I am getting is different from yours. ”

Hearing this, Geithner's face immediately turned red. He realized that Gad. Lark's implication was that he had leaked secrets to large financial institutions before the Fed made its announcement. This behavior is naturally not allowed, and if the name is confirmed. His prestige on the Fed's Open Committee will be greatly diminished.

Hearing the conversation between the two of them, the other committee members stopped their discussion and turned their eyes to the two people. The content they were discussing was a sensitive topic, which naturally attracted everyone's attention, and for a moment the entire conference room was silent, and everyone waited with bated breath for Geithner's explanation.

At that moment, Bernanke coughed lightly. After shifting everyone's attention to himself, he waved his hand to ease the atmosphere of Yan Sù. Then he said, "Okay, thank you, Mr. Lack. Please continue, Vice Chairman Geithner. ”

Seeing that there is no way to escape from it. Geithner had to bite the bullet and say, "Mr. President." Ladies and gentlemen, I cannot speak for Ken. What Lewis said, there's no way I can stop him from saying something. What are the areas of the bank's powers, what policies do we have in terms of windows, and that's what I'm helping them understand. I think for the other scopes, we all have a responsibility to help financial institutions understand their spheres of power. Because people don't usually use the discounting function much, they don't know much about discounting tools in some way. ”

Throughout. He did not respond positively to whether he had leaked to the BOA, only emphasizing that he was helping the BOA better understand the discount service. But everyone present knew it in their hearts. This kind of avoidance of the important and trivializing the argument cannot be justified at all, and he still cannot clear the suspicion of leaking secrets.

Although in principle members of the committee are not allowed to divulge FOMC secrets, in fact they are always interviewed by reporters before the meeting to give their opinions on the current market. And a well-intentioned journalist who only needs to visit all the people attending the meeting can summarize their comprehensive opinions on the market and then accurately predict the Fed's upcoming policy, which is also a leak.

In fact, since becoming the chairman of the Federal Reserve, Bernanke himself has a royal reporter, who can publish some inconvenient things in the newspaper at the right time, which is strictly a leak.

While the current discussion won't be released until five years from now, no one wants to give it a handle, so the others have remained silent as Geithner and Lark have been at loggerheads. And it doesn't make much sense to continue to delve into this issue. At that moment, Bernanke coughed lightly and replied rather embarrassedly: "Vice Chairman Geithner is right, we, as Fed staff, do have an obligation to help the bank understand certain areas of power. Let's discuss what is likely to happen in financial markets after the rate cut, so that we can discuss how these policies will be effective today at next month's FOMC meeting. ”

Naturally, others will not continue to dig deeper into this issue, and at the moment they tacitly bypass this topic and continue to discuss.

……

The S&P 500 index jumped 43.13 points on the day, from 1,476 points at the opening to 1,519 points, an increase of 2.92%, due to the impact of the Fed's interest rate cut. The Dow Jones Industrial Average surged 335.97 points, or 2.51%.

The market has responded positively to the Fed's rate cuts.

And just two days later, Rehman Brothers, the fourth largest investment bank on Wall Street, also released its third-quarter earnings report, in which Rehman Brothers earned $887 million in the third quarter, equivalent to $1.54 per share. Although it has declined compared with the same period last year, it is generally better than the market expectation. Prior to that, the market was forecasting third-quarter earnings of just $1.47 per share.

This performance boosted the U.S. stock market, and the Kaminari brothers raised their eyebrows. Since February, their share price has fallen by about 30% due to frequent negative news involving the subprime mortgage bond market. On the day of the results, their stock price rose 3% and stood above the $60 mark.

With better-than-expected results and a rise in stock prices, it was only natural that Kaminari Bros. analysts began to make a big deal about the market. They said that despite the losses in the CDO market, with the fixed income business falling by about $700 million, the Fed's decisive intervention and the worst of the worst have passed, and the anxiety about investors' worries about investment bank performance due to the credit crunch has been greatly eased.

Kaminmen Brothers' Chief Financial Officer (CFO) Chris Brown. Omira told the market that confidence in the credit market is slowly recovering, and that the credit crunch has improved dramatically, and that the worst of the market is behind us. While this may be the end of the most recent lucrative cycle, the future is undoubtedly looking for good. It is now essentially time to put the risks that arise from the CDO market behind you.

……

"Zhong Sheng, how dare this guy say that, is he crazy?"

In front of the TV, Jiang Shan quietly listened to Omila's speech, a look of disbelief, he didn't believe what the other party said, in the latest survey, he saw with his own eyes that more residents are abandoning or about to abandon their houses, and this trend is showing a trend of intensification. (To be continued......)

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