After Fed's rate hike, 'double dippers' emerge and see their shadows

Did this 'double dipper' see his shadow?

After last night's not-so-surprise announcement that some of the Fed's emergency lending provisions were being ever so lightly diminished (no bank is using the discount window now anyway), there was a quick and brutal reaction in stocks and bonds and a jump in the dollar. We expect knee-jerks to be part of the equation.

This morning, however, the Double Dip camp is going to make itself heard. They will tell the story of how liquidity was yanked too early in the '30s before the fragile recovery could stand up on its own two feet and how this led to a slide back into depression. There will be references to 90's Japan galore.

My pal The Pragmatic Capitalist has two takes on this latest move - a cautious one from Morgan Stanley and a nonchalant one from BNP Paribas. Both worth your consideration before tuning into whatever hysteria business television has in store for us today.

A Policy Induced Double Dip? (PragCap)

Add/view comments on this post.


The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the blogger's own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.