President Carter has waited so long to unveil his newest anti-inflatin strategy that he virtually guaranteed the policy will fail in at least one of his purposes; rekindling the long-term capital markets that have been decimated since January.
Amid nearly four weeks of rumors that the administration was hard at work on a new program to fight the debilitating inflation that has hit the country, Wall Street has built up its expectations to a feverish level.
When the policy is announced, perhaps as soon as this week, it will not take long for Wall Street analyst to realize that the policy can do little in the near term to deal with the unnerving inflation that has buffeted consumers, businesses, borrowers and lenders alike.
Of course Wall Stret, and Main Street, should know already that there is little Carter can do to make a dent in the price surge except wait it out. That should have been apparent when the architects of economic policy first sat down to mold a new package last month.
And there is evidence now that administration officials realize there is little they can promise and less they can deliver. As a result, officials say, the president may make his announcement in a much less dramatic fashion than originally planned.
Even Wall Street wizards have been aware of the limited options Carter has -- options he has limited even further by publicly declaring his opposition to wage and price controls.
But such is the desperation in the nation's financial markets that bond prices rally and falter on this or that rumor about the impending package.
"If he'd done something 30 days ago, when rumors first began to leak, he might have accomplished something. But now there's so much emotional reaction that the expectations of what the government if going to do has been blown out of all proportions," said a prominent bank executive.
Although Carter has ruled out seeking legislative authority to impose wage and price controls, he already has on the books authority to put clamps on the granting of credit to business and individuals.
The bond markets have rallied more than once when rumors circulated that Carter would impose credit controls.
In normal times, market participants -- from the high-placed executives to the bond traders -- would recoil at the notion of any government-imposed constraints on their activities , but now many look ready to welcome them.
"It's a sign of the times," opined on e Wall Street observer. "I know they'll be damaging, you know they'll be damaging, and so does everyone else here. But they're grasping at straws and credit controls are one of the few straws they can reach for."
So far, except for the few limited bond markets rallies, the rumors of credit controls have caused an effect opposite to what the administration wants, or perhaps anticipated.
Businesses have been knocking down their bankers' doors in a rush to get loan commitments before the Federal Reserve puts any constraints on.
In some cases, bankers report, companies are even borrowing money they do not need now -- at sky-high interest rates -- just in case the administration interferes with loan commitments banks have made to their customers.
Carter also is expected to play on the balanced budget myth which so many on Wall Street and elsewhere associate with sound federal fiscal policy. m
But it won't take long for the pale reality of the long-expected program to set in. Effective consumer credit controls might have been applied a year or two ago. But today -- with high interest rates, usury laws and slumping auto and housing markets -- consumer creidt demand is ebbing by its own accord.
The administration may make a token attempt to cut down on consumer use of credit cards. But credit card issuers are losing money already and doing their best to discourage card small percentage of total consumer credit.
Controls on business use of credit will be even more difficult to administer. Broad and heavy-handed restraints could cause bankruptcies of small businesses and worsen the expected recession.
And while Wall Street may well sigh with relief if the president promises to balance the federal budget in 1981 -- he promised that four years ago too -- it will not take many hours for the markets to realize that Congress, not the president, writes the federal budget.
"I'm waiting for the announcement," confided one manager of a small investment fund. "It'll have a buoyant impact for a couple of hours. I'm going to make sure that I go short in bonds during those couple of hours. After that, the markets will plunge again."
He plans to make a lot of money by going short: he expects to deliver bonds at a much higher price than he will have had to pay for them.