Wellington Leg: According to sources with no insight or knowledge The Federal Reserve lowered the discount rate after frantic telephone calls to Wellington Leg’s own Eugenia Phaeton. The Fed governors called Eugenia several times but were thwarted by Eugenia’s mom, Emma Phaeton. As the yen carry trade unwound and secondary financing alternatives evaporated, Eugenia completed her homework allowing the monetary system a breather.
Here is the chronology: Ben Bernanke telephones: Eugenia is eating a peanut butter and jelly sandwich. Mrs. Phaeton warns Eugenia about speaking with her mouth full: commodity traders panic.
William Poole calls: Eugenia is taking a nap. Word passes to the White House that Eugenia is taking a nap. The NYSE gyrates.
13:45: Eugenia awakes from her nap and closes her yen position. London trading collapses, the euro spikes, gold plummets. Mrs. Phaeton announces spaghetti for dinner. Ben Bernanke wants spaghetti too.
14:12: Wheat futures rise on pasta consumption. Eugenia would rather have meatloaf. The Fed notifies the White House: it’s meatloaf tonight. Shanghai trembles, Hong Kong crumples. A woman in Plano Texas sees “Meatloaf” at the mall.
15:01: Little Timmy from next door asks if Eugenia can come out to play. Fed Governors assemble in Mrs. Phaeton’s driveway: reluctantly she makes iced tea. Eugenia offers Ben a gummi bear and says “cut the discount rate.”
The White House is notified. Ben cuts the discount rate. NYSE stabilizes before the bell. Mrs. Phaeton searches for lemons.
19:45: Asia stabilizes. Eugenia brushes her teeth and says her prayers. The telephone rings and Mrs. Phaeton answers saying, “If this is a Fed Governor, this is too late to be calling.” Ben Bernanke hangs up hoping the Phaetons don’t have caller ID.
“Eugenia Saves Capitalism” is the headline at the PS 117 Terrier Notes. A woman in Valdosta Georgia sees Ben Bernanke at the mall. Thirty. Whew, that was close. Tex Lex reporting.