If you have not read Tom Wood’s book “Meltdown” you likely do not understand the huge role the Federal Reserve played in the latest economic collapse we are still experiencing. They are the root of the problem – artifically low interest rates provoked mal-investment, and it came back to haunt us. The economic collapse was a market re-adjustment – houses were not worth nearly what they were selling for – credit was made easy (via Fannie Mae and Freddie Mac).

To answer Zachary, the fed may be willing to go very far in propping up the market, but they shouldn’t be propping up the market at all!