“In the old days … the Fed controlled the federal funds rate with open market operations,” Antulio Bomfim, a former Fed economist now with Macroeconomic Advisors LLC in Washington told Reuters. “Now, at least in this period when reserves are over-abundant, the way the Fed hopes to raise the federal funds rate will be primarily by raising the interest rate it pays on reserves.”

Chuck Butler (The Daily Reckoning):
What a ride yesterday for the currencies! Gold? Well, at one point gold had shot up $24 on the day! It topped out at $1,142… The shiny metal then gave some back on profit taking, but gold holders have got to love it! Those who keep waiting for a pullback. Well, they might still be waiting when the cows come home.

Stress tests finally print!  The Gov’t wants you to “feel good”…  Job losses decline on a weekly basis…  Happy Mother’s Day! And Now… Today’s Pfennig!

With dropping oil prices and the current global attitude on commodities, Horacio Marquez of Money Morning recommends this offshore drilling company as a top performer in its sector.

“We have never seen such a foolhardy effort on the part of the world’s governments to prevent a correction,” says Bill Bonner. The market is not being allowed to work as it should. First Wall Street told us we could borrow and spend forever. And now messieurs Bernanke and Paulson tell us they can fix this mess. Bill says all they will succeed in doing is creating the next major monetary crisis.

U.S. stocks soar!  Currencies rally!  Consumer Confidence at an all-time low!  Getting off the bench! And Now… Today’s Pfennig!

Billionaire investor George Soros just gave a great interview with PBS’s Mill Moyers. In it he said the massive breakdown in turst on Wall Street marks the “end of an era.”

It’s not a new subject for Soros. He accurately predicted the crisis in subprime loans that punctured the lung of the financial markets.

In the interview Soros also slammed Treasury Sectretary Hank Paulson, saying the onetime Goldman Sachs boss was part of the very Wall Street system of “financial engineering” that caused the crisis in the first place.

Those who were blindsided by the recent financial meltdown are now loudly blaming the “free market” for its failure to police its own excesses, and are calling for greater regulation to prevent future disasters.