WWBD?

You've probably heard the slogan "What Would Jesus Do?" -- abbreviated as WWJD. Well, the question on Wall Street this week is "What Will Bernanke Do?" -- WWBD, for short. (No I'm not equating policy makers with religious figures ... just trying to have a little fun with abbreviations!)

Faced with a full-scale housing and mortgage market meltdown, does Fed Chairman Ben Bernanke signal an imminent rate cut to soothe traders and investors, and give the Greenspan put a new lease on life? Or does he take the tough love path, essentially giving credence to the viewpoint that traders and investors are getting their just desserts for taking on too much risk?

Some thoughts from various media outlets ...

The New York Times, 8/5:

The Wall Street Journal, 8/5:

Reuters, 8/5:

MarketWatch, 8/6:

If you want to know my view, it's that the Fed will acknowledge the possibility that tighter credit conditions could slow the economy, but that it's far too early to panic about it. In other words, we won't get a rate cut and we probably won't get any hint of a cut. I wouldn't be surprised to see the Fed shift to a "neutral" rate bias, however.