WSJ: “The Federal Reserve’s decision to lower the discount rate and ease the terms of discount borrowing but not to cut its main rate, the fed funds target, suggests that for now it believes the problems in the markets are mostly related to the availability of cash, not the price of cash.”

Readers, what do you think? Have we staved off a recession? Is the worst over, or will this band-aid get soggy and fall off (eew)?

Personally, I think this will allow the cash injections to stabilize the markets over the next month, and provide stability for a basically-flat 4Q. My guess now: A receovered Dow 14200 by Dec 31, providing no major hurricanes, terrorist attacks, or scandals.

http://blogs.wsj.com/economics/2007/08/17/odds-of-fed-funds-rate-cut-increase/