Consider: The FED’s role is to support the business economy as well as control inflation. ( Yes they are opposite, but that is still their directive.)

Point, realize a small correction now could probably avert the necessity of a larger correction later, even possibly a full scale bailout. Would it not be better to cut rates .25% now versus the necessity of a .50% or a .75% cut later or even worse. Making the cut later after many more Billions $ go up in smoke is ludicrous as well as wastefull.

Although the problem is now Bernake’s, that is only because Greenspan kept the easy money flowing too long instead of gradually tightening. But by waiting longer with this problem Bernake will necessitate even more accomodating later. Late reactions are always greater than early action, this is true in sailing boats, flying airplanes and managing business as well as managing the economy of a country.