The Fed: 'Wall Street's Bitch'

The deeper than anticipated rate cut launched bloggers into feats of rhetorical gymnastics that showcased their wit and wonderment

"Shock and awe" was the pervasive theme on financial blogs after the Federal Reserve cut interest rates by a hefty half percentage point Sept. 18. Many pros were expecting a more muted 25-basis-point cut.

Barry Ritholtz at The Big Picture said he was one of many surprised by the 50-basis-point cut. Along with the tight credit markets and inflation, he wrote that the Fed now has a third problem: "They have become Wall Street's bitch."

Images of "Helicopter Ben" showering money over landscapes appeared on a few blogs. DealBreaker displayed one of the Fed chairman throwing dollar bills out of a helicopter over the U.S. It said that a bearish investor told them "50 BPS=Fifty Bailout Points." It added: "That sound you hear? That's the sound of Ben flying overhead in his helicopter."

Roger Nusbaum at Random Roger's Big Picture posted one of a Bernanke action-figure doll dressed in fatigues in a yellow helicopter holding a briefcase, saying, "Now you can drop money out of a helicopter!"

The metaphors ran rampant. Charles Kirk from The Kirk Report mixed a few too many, saying the market got its fix like a "drug addict who stumbles on a cache of powerful drugs." He also compared the easy money to a 5-year-old opening presents on Christmas morning, calling it "Christmas in September."

Others a Bit More Muted

Some bloggers were not so shocked, however. John Ogg at 24/7 Wall Street thought the 50-point cut was needed "to smooth things out, with added measures down the road."

Yet another blog raised the question of how the Fed's big move will affect private equity. Think B.I.G. by Bespoke Investment Group pointed out that one of the reasons for the rate cuts was to "help grease the wheels of the credit markets." But it noted that its Bespoke Discount to Takeout Price Index of buyout companies didn't fare as well as the Standard & Poor's 500-stock index on Sept. 18.

Think B.I.G. also posted a chart of the S&P 500's performances during rate-cut cycles. If you guessed that the market usually rises when rates fall, maybe you can get a free ride in Bernanke's helicopter.

Before it's here, it's on the Bloomberg Terminal.