Recently I suggested the need for a coordinated monetary policy rate cut. That cut arrived in early October, with the Fed, the European Central Bank and other central banks cutting their policy rates by 50 basis points (bps). The action is necessary, but only cosmetic, and it is too little, too late. European central banks should have cut rates many months ago, before the recession and financial crisis became so virulent. Now, 50 bps for the Eurozone is peanuts at a time when a minimum of 150 bps is necessary to restart the economy and unclog frozen financial markets; 50 bps is also too little in the U.S., given the damage to the real economy from the financial shocks of the last month.
~ Nouriel Roubini, "The New New Deal," Forbes.com, October 9, 2008