Held Hostage - Vice Chair Kohn Remarks

WOW....just catching up to the actual comments from Fed Vice Chairman Donald Kohn. Some very important statements here:

We should not hold the economy hostage to teach a small segment of the population a lesson

Central banks try to avoid the creation of a moral hazard...but to those who lend, borrow, or run money should bear the consequences of their decisions.

Key here is "However, in my view, when the decisions do go poorly, innocent bystanders should not have to bear the cost."

Since the moral hazard issue is now off the table, in this blogger's view, the Fed can use all the tools in their toolbox to prevent contagion, and to help those "innocent bystanders" as well as the broad economy. This is bullish for stocks. We'll see if Gentle Ben affirms these comments tonight.

Yowsa!