Why Give the Fed the Benefit of the Doubt?

Where there is smoke, there is no fire? I keep hearing about this intra-month Fed meeting cut. Where is it coming from? What evidence do we have? Where is the knowledge coming from? Does someone actually know something? Are these people just spouting?

I can't tell you how much money has been lost with this intra-month meeting call. It is remarkable. There is also a lot of talk about how the Fed hasn't given clear signals.

That's nonsense. It has been loud and clear: "We aren't that worried. We think that gradual cutting of rates is warranted. We did a half-point cut because we were momentarily worried about employment but we aren't anymore. We have lots of strength and inflation in the country. We have a bad housing market that's been contained. We have no bank failures to worry about."

I can't be more abject than that.

The Fed's not focused on National City (NCC - commentary - Cramer's Take) or Marshall & Ilsley (MI - commentary - Cramer's Take). The Fed's not looking at Citigroup (C - commentary - Cramer's Take) or Merrill (MER - commentary - Cramer's Take) other than to note that it was really easy to raise capital, which is therefore inflationary.

If I could simply get my hands around where the intra-month chatter is coming from, I would feel better. Something like, "I am close to the Fed," or even, "Here's what I am hearing."

No, it's all about, "This is what they should do." Or, "This is what's going on." There is no authority to the calls or predictions.

So, I ask you, why are we giving the Fed the benefit of the doubt?

At the time of publication, Cramer was long Citigroup.

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