"Bill, Do you think they increased the margin req'ts solely to flush out speculators from that market? Would seem the rational thing to do if you fear inflation inspired by higher commodity prices. Probably the only thing you could do...

Seeing that the move worked (temporarily) how long until they look to do similiar thing in the highly political crude oil market? Such a move would be a white flag of surrender IMO -- how would you interpret it?

Great blog, I check it 10-15 times a day!

Ken"

I replied:

KCB: Was too busy today to blog much.

Margin requirement changes are needed. I understand that as I was in the business at a CEO level.

My point could be better explained, I guess, which is that the Fed is reacting. In fact over-reacting. When they saw three days of a plummeting USD, that wasn't speculation. That was other central bankers and big bank trading floors (Goldman, Merrill etc) doing it.

If the Fed, the commercial banks and the Exchanges wanted to be fair to people, they could say, here is what is happening, here is why we are concerned, here is what we are going to do about it, and now you have 30 days to put your affairs in order.

What goes on today is absolute and total garbage. These people are bullies, and liars. It is no wonder why the Administration and the Fed get so little respect today. What are they doing to earn it?

I am not going to be a 'homer' here, but Canadians do have (now) a Prime Minister and a Minister of Finance and a Bank of Canada governor who I think can be respected for their actions. (Time will tell.)

As I say, the Fed is not bigger than the market. The Administration is nothing more than a handful of people. We the owners of capital give them too much respect as it is.

We do that because we know the importance of the job. But sometimes people in high places take actions that are disrespectful of the people who put them there.

First of all, we don't need a Fed. The Administration could do the job. They could then stand or fall on their performance too.

A recent Administration and Fed head had lots of detractors, and rightly so, but nothing they did was remotely as serious as the mistakes being made today.

Could you imagine Bob Rubin doing what the "Snow"man has done? Or Greenspan ever trying to jerk our chain like Bernanke has a couple times in what a month on the job?

I think if the Dem's win the White House next time (Anybody But Hillary), we could even see Bob Rubin in as Fed head. And that would be enough for me to vote Blue -- if I had a vote. :-)

Cordially, /Bill