February 14, 2008 (LPAC)--Michael "Mussolini" Bloomberg's news service carries as its second lead item yesterday, a demand to the Federal Reserve for another, hyperinflationary emergency rate cut before the Fed's next regular meeting March 18. Bloomberg's story uses the cynical "complaint" that the Fed's two panic cuts on Jan. 22 and Jan. 30 didn't lower actual interest rates for businesses, credit card users, mortgage or auto loan borrowers--only for banks--and therefore more of the same is needed right away! "Bernanke Will Have To Lower Rate Again" is the headline. "Elevated borrowing costs mean Fed Chairman Ben S. Bernanke will have to reduce rates further to revive the economy, Fed watchers said," according to the wire, which quotes arch-monetarist Martin Feldstein of Harvard as Bloomberg's "Fed-watcher."

In fact, companies are paying more to borrow now than before the Federal Reserve reduced its benchmark rate by 1.25%, according to data compiled by Merrill Lynch. Investors are demanding an extra yield of 2.37% (over Treasury securities) to buy investment-grade U.S. corporate bonds as of Feb. 12, up from 2.24% on Jan. 21. Premiums for high-risk, high-yield securities have risen 0.25%. Credit card rates have gone higher in the past month, and now mortgage rates are rising as well.

Looking to sink the dollar further, {Bloomberg} says traders are expecting the Fed to cut interest rates yet again, by at least 0.5%, even before the next Federal Open Market Committee's meeting on March 18.

Banks, however, are getting increasingly "free" bailout money. The Fed "auctioned"--i.e., injected--another $30 billion in funds to commercial banks on Feb. 12, the fifth in the series of auctions pumping money into the system, launched in mid-December. The interest rate of 3.010% was the lowest rate for any of the five auctions held so far.