The FOMC did exactly as Wall Street instructed them and left “low rates for an extended period of time” unchanged.  The FOMC has just signaled to the markets that they are perfectly OK with ramping up global leverage plays and allowing the dollar to fall.  As much as it pains me to say it, I fear that this Fed is going to allow devaluing the dollar in order to inflate our way out of the debt trap.  Bernanke and Co. would deny this, but it’s the only thing I can think of now to explain their lack of action, knowing they are risking another debacle of bubble implosions down the road.  Bernanke has given global speculators the green light to put the world’s financial system back at risk.

Speaking of games . . .  It’s widely known that Wells Fargo, thanks to their takeover of Wachovia, has more than $100 billion in Option ARMs on their balance sheet — which are facing resets requiring principal payments as well.  Given the horrendous equity positions of the borrowers, walk away risk is very high. But Wells Fargo has announced they will NOT require borrowers to meet the contract.  Wells is changing mortgages to interest only for another six to ten years.  This is a risky bet and a ploy to kick the can down the road.  We just simply cannot face the music.