Fed slashes US rates in emergency action
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Jan 22, 2008, 15:01 GMT
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Chicken Little: The sky is falling!
Whats the big hurry?
Election day?
Is that who they are doing it for?
Nah, this is the only way that they can bail out the banks without a huge infusion of cash, which would be hard to hide. The next step will be some kind of moratorium on foreclosures in the US, plus a few tax gimmicks and some walking around money for Bubba Jones and his old lady.
Who will pay for it? American citizens, the Chinese and OPEC. How? Through inflation. What will China and OPEC do? They might well switch over to the Euro and dump dollars. That will not help them or us or the Europeans.
The lid has been torn off of Hell, folks. Get ready.
I'll buy some of that, but face it, stocks are not going to go up indefinitely, and neither is land. Since when is a recession some kind of emergency?
We've had seven spectacular years of growth, and a forecst of a recession by the liberal press EVERY year. Even a broken watch is right twice a day.
It has been rumored that Judah Ben-Hur, Ambassador to The American Republic will be the Presidential candidate for America in 2012. Their Party Platform will be published soon, with a website soley for that purpose. Another example of American History being made by someone aganist all odds...
Since when is a recession some kind of emergency?
Since October 29, 1929 seems a good starting point !
RE:'I'll buy some of that, but face it, stocks are not going to go up indefinitely, and neither is land.'
And you can't borrow money forever!
RE:'Since when is a recession some kind of emergency?'
When you are out of job and can't pay your bills because you didn't save any money.
RE:'We've had seven spectacular years of growth, and a forecst of a recession by the liberal press EVERY year. Even a broken watch is right twice a day.'
This is the real McCoy, SP4, not a hopeful mirage that only the newspukes can see. We HAVE had some really good times. Did Americans save enough money to be called real savings? NO! Rich folks collect interest. Poor folks pay it. The banks like poor folks because they pay interest. The politicians like having everyone ninety days from bankruptcy for a reason. That condition makes it easier for them to control you. Think about it.
RE: Chicken Little: The sky is falling! Whats the big hurry? Election day? Is that who they are doing it for?
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I can see this is someone without the least education in economics; and possibly paid to carry Bush's baggage - since no one could be this outright dumb and feed himself successfully.
This is a very serious moment, as the Fed waited far too long to act. The Fed was going to wait for the next regular meeting, and dummy-in-chief was going to wait for the State of the Union.
Foreign markets saw this as an absence of understanding of the situation, and a failure to understand how a global economy operates. The reaction was a selloff across foreign markets Monday, and despite the Fed's 3/4 point cut, further selloffs in overseas markets today.
This is a crisis of confidence. No one believes that Bush can do anything useful at this late date. $150 billion or so will be about half of what would be needed to make an impact, and that impact would be three months out past passage of legislation. Bush has already removed the disconnect to continuation of the existing tax cuts, and this jerk NEVER yields; so it's a perceived problem even in the never-never land of the West Wing.
The Fed will have to cut rates more, and everyone knows it. The DOW gapped down sharply this morning, recovered, and is again falling; because the fundamentals continue to get worse, like SP4's native intellect.
The discussion has moved from 'recession' to 'bear market', since there's now a complete lack of confidence in the paper that banks and other institutions hold, and banks do not even lend to each other. The Northern Rock deal in Britain is a saver for them, but the problems are far from over, with many foreclosures due for 2008, and buying power sapped by lower home values and upcoming mortgage rate increases.
SP4, just shut up. You're tolerable as the daily jackass in normal times, but now you're just a leaky faucet - drip, drip, drip.
This is a media overreaction, but it indicates how seriously the financial community sees the problem, and for Bush it's another photo-op in which to accomplish zilch. While there are those blindly loyal to Bush in the U.S., he has no reputation left at all overseas, and those markets feel the lack of U.S. leadership; as well as the overhang of more potential Mideast problems and the relationship to energy prices. After the Monday drop, normally there'd be some recovery the next day overseas, but it's not taking hold.
www.forbes.com/markets/2008/01/22/asia-stock-update-markets-equity-cx_v k_0122markets05.html
The shadow of a bear market loomed large Tuesday as stocks in Europe and Asia failed to halt the equity sell-off, with major indices down again following Monday's worldwide slide.
Benchmark indices across Europe failed to cross over into positive territory during afternoon trading on Tuesday, despite an attempt at bargain-hunting in the beleaguered financial sector.
The traditional definition of a bear market is a drop of 20%, from a previous high, in the space of one year.
The global sell-off came on the back of prolonged fears of a recession in the United States, which the U.S. Federal Reserve tried to calm on Tuesday by cutting the federal funds rate to 3.5% from 4.25%.
The U.S. cannot cut rates while everyone else remains as-is. Interest rates are what attract investment, and other countries in the Euro area would have an advantage in attracting investors. In addition, banks are not freely lending, and rate cuts could help. A stronger Euro and weaker dollar impairs Euro and German exports further, and slows the global economy. Stagflation becomes a threat, eventually, with needed rate cuts potentially permitting inflation to rise.
'European inflation at a six-year high of 3.1 percent, breaching the ECB target of just below 2 percent, is limiting policy makers' room for maneuver. President Jean-Claude Trichet said Jan. 10 that the bank is ready to act ``preemptively'' to raise rates to contain consumer prices.'
If the ECB and Britain are forced to act earlier than their regularly scheduled session, it signals a real problem.
www.bloomberg.com/apps/news?pid=20601087&sid=aT6mSXgLBTT8&refer=home
Jan. 22 (Bloomberg) -- The European Central Bank and the Bank of England may have to follow the Federal Reserve and cut interest rates as the risk of a U.S. recession threatens to drag down a global expansion, economists said.
``From a European and a U.K. perspective, the Fed cut adds to the risk of more and quicker rate cuts,'' said Amit Kara, an economist at UBS AG in London. Kara, a former economist at the U.K. central bank, predicts four cuts from the Bank of England this year and two by the ECB.
The Fed today lowered its benchmark rate in an emergency move for the first time since 2001 after global stock markets tumbled amid signs the world's largest economy is sliding into recession. The move spurred a rally in European stocks, though failed to stem a decline in U.S. indexes.
The widening interest-rate gap between the U.S. and Europe may spur gains in the euro, worsening the outlook for an economy already showing signs of a slowdown by hobbling exports. German investor confidence dropped to the lowest since 1992 in January and European manufacturing growth slowed in December.
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JohnJan 22nd, 2008 - 15:25:17
SP4 - watch out for those chickens returning to roost
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