Fed Bailouts and the Bubble Boys | TPMCafe
Given the gravity of the situation, the hedge fund crew is doing what all good capitalists do when things go badly: run to the government.
Specifically, they want the Federal Reserve Board to bail them out with lower interest rates. They hope that this will buy them the time needed to dump their mortgages on less well-informed investors.
The hedge fund folks say that this is the Fed’s job, that it must step in as the lender of last resort and restore order to the market. That ain’t necessarily so.