Paul Krugman writes:
Another false non-alarm? March 19: The story of this financial crisis has been one of false non-alarms. Again and again, the Fed has taken action; markets seem to sound the all-clear; everyone breathes a sigh of relief — and then, in short order, panic returns.
Here we go again....
There’s some slightly good news out there. Fannie Mae coupons are down; I suspect that’s not because investors think mortgages are any less risky, but because they’re more confident than before that the feds will, in the end, bail out Fannie Mae if necessary. (I agree.) How much this will help the real economy isn’t clear.
But overall, this really has to be disappointing to the Fed.