Fed orders emergency rate cut to 1.5%

[Dissipate]

AP
Fed orders emergency rate cut to 1.5 percent
Wednesday October 8, 7:04 am ET
By Jeannine Aversa, AP Economics Writer
Federal Reserve Board cuts key interest rate by half percentage point, seeks to revive markets

WASHINGTON (AP) -- The Federal Reserve has ordered an emergency interest rate cut of a half a percentage point to cope with the worst financial crisis since the 1929 stock market crash.

Fed Chairman Ben Bernanke and his colleagues ratcheted down their key rate by 0.5 percent, to 1.5 percent. The action revives the central bank's rate-cutting campaign which had been halted in June out of concerns that those low rates would worsen inflation. Since then, however, economic and financial conditions have dangerously deterioriated, forcing the Fed to reverse course.

The fact that the Fed felt it could not wait until its regularly scheduled meeting late this month underscored the urgency of the situation.

Text

It is clear to me that the Fed is running out of options. The bailout plan failed to revive the markets so now it is using emergency actions to try to stave off a full scale meltdown. Could there be a sucker rally just around the corner?

 

[scruffypup]

It is clear to me that the Fed is running out of options. The bailout plan failed to revive the markets so now it is using emergency actions to try to stave off a full scale meltdown. Could there be a sucker rally just around the corner?

I think you are ignorant of the "bailout" plan,.. it was enacted last week, it hasn't even gone in effect first of all,... it will take months for it to take full effect. Just because the DOW has gone down the last two days has no bearing on the effectiveness of the plan that was passed. Unfortunately many Americans cannot see that and rely on media hype,.. "well this happened yesterday and this happened today,.. there must be a failure!!!"

The downturn over the last two days is a direct result of international economies having downward pressure, nothing to do with our rescue plan. Our government is trying to coordinate with others to get a coordinated stabilization, which includes rate cuts, which in turn will be more immediate than the rescue package but less likely to have long term effects than the rescue package.

The Federal Reserve is doing what it can to bridge the next few months until things stabilize. That is what the Fed is for,.. short term and immediate effects on the economy, the politicians are there for longer term effects.

 

[LegendKiller]

Originally posted by: Dissipate

AP
Fed orders emergency rate cut to 1.5 percent
Wednesday October 8, 7:04 am ET
By Jeannine Aversa, AP Economics Writer
Federal Reserve Board cuts key interest rate by half percentage point, seeks to revive markets

WASHINGTON (AP) -- The Federal Reserve has ordered an emergency interest rate cut of a half a percentage point to cope with the worst financial crisis since the 1929 stock market crash.

Fed Chairman Ben Bernanke and his colleagues ratcheted down their key rate by 0.5 percent, to 1.5 percent. The action revives the central bank's rate-cutting campaign which had been halted in June out of concerns that those low rates would worsen inflation. Since then, however, economic and financial conditions have dangerously deterioriated, forcing the Fed to reverse course.

The fact that the Fed felt it could not wait until its regularly scheduled meeting late this month underscored the urgency of the situation.

Text

It is clear to me that the Fed is running out of options. The bailout plan failed to revive the markets so now it is using emergency actions to try to stave off a full scale meltdown. Could there be a sucker rally just around the corner?

Yeah, the rescue plan is going to be immediately effective.

Do you know how long it takes to set up a hedge fund? Hire the right people? Find the right investment opportunities? They need to hire hundreds, if not thousands, of people to manage this. Even if they outsourced the majority of the work it's going to still take a few months to actually be able to get a working group that can transact in the market.

Chill the fuck out sparky.

 

[DisgruntledVirus]

Apples and Oranges there OP....

 

[First]

Originally posted by: Dissipate

AP
Fed orders emergency rate cut to 1.5 percent
Wednesday October 8, 7:04 am ET
By Jeannine Aversa, AP Economics Writer
Federal Reserve Board cuts key interest rate by half percentage point, seeks to revive markets

WASHINGTON (AP) -- The Federal Reserve has ordered an emergency interest rate cut of a half a percentage point to cope with the worst financial crisis since the 1929 stock market crash.

Fed Chairman Ben Bernanke and his colleagues ratcheted down their key rate by 0.5 percent, to 1.5 percent. The action revives the central bank's rate-cutting campaign which had been halted in June out of concerns that those low rates would worsen inflation. Since then, however, economic and financial conditions have dangerously deterioriated, forcing the Fed to reverse course.

The fact that the Fed felt it could not wait until its regularly scheduled meeting late this month underscored the urgency of the situation.

Text

It is clear to me that the Fed is running out of options. The bailout plan failed to revive the markets so now it is using emergency actions to try to stave off a full scale meltdown. Could there be a sucker rally just around the corner?

It always amazes me to see the goldies (i.e. commodity nuts) continue to peddle their layman understanding of economics and finance. How has the bailout failed in 4 days? Just farking laughable. :laugh:

 

[Pliablemoose]

It wasn't just the Fed, it was the world's central banks, never happened before.

I think Germany stayed on the sidelines, and there have been rumors about some shops in Germany not accepting UK bank credit cards.

The world's major central banks moved in concert Wednesday to slash key interest rates as policy makers struggle to head off global financial turmoil that has threatened to throttle world economic growth.

Text

 

[StageLeft]

Sweet, I bet it will help as much as the last ones.

and there have been rumors about some shops in Germany not accepting UK bank credit cards.

Link? That seems unrealistic, because when you accept a UK Bank's visa, isn't visa on the hook? I mean, you get that money pretty much right away. The concern would be whether banks in the UK should be lending to people via plastic.

 

[jjones]

Originally posted by: scruffypup
That is what the Fed is for,.. short term and immediate effects on the economy, the politicians are there for longer term effects.

I'm not getting into the whole bailout debate, but this statement is just absurd. That's what the Fed is for? To impact and/or regulate the economy? That's not what the Fed is for, it's just one of the unfortunate side effects of having something like the Fed. The Fed's use/misuse in manipulating the monetary supply is part and parcel of the economic shenanigans that get us into these kinds of crises.

 

[Blain]

"Rate Cut"

That will get this country back on track... MORE CHEAP MONEY :shocked:

Let's just get this thing over with!
Why don't they simply pay 1.5% to banks to borrow? :roll:

USA... Superpower or a Banana republic?

 

[Engineer]

S&P and Nasdaq futures shot through the roof initially, but have now fallen through the floor. Worst levels that I've seen this week (-50+ on the Nasdaq futures). Going to be another bloodbath.

 

[StageLeft]

Originally posted by: Engineer
S&P and Nasdaq futures shot through the roof initially, but have now fallen through the floor. Worst levels that I've seen this week (-50+ on the Nasdaq futures). Going to be another bloodbath.

This is the bottom. Go all in. Trust me. I'm maxing my credit cards today and throwing everything I can find into S&P index, even the kids' paltry 529. It's now or never, folks!

 

[Pliablemoose]

Originally posted by: Skoorb
Sweet, I bet it will help as much as the last ones.

and there have been rumors about some shops in Germany not accepting UK bank credit cards.

Link? That seems unrealistic, because when you accept a UK Bank's visa, isn't visa on the hook? I mean, you get that money pretty much right away. The concern would be whether banks in the UK should be lending to people via plastic.

I just heard it was a software glitch, it was untrue...

 

[Engineer]

Originally posted by: Engineer
S&P and Nasdaq futures shot through the roof initially, but have now fallen through the floor. Worst levels that I've seen this week (-50+ on the Nasdaq futures). Going to be another bloodbath.

Wow, markets dived on the open and have now went positive. Shocked.

 

[GTKeeper]

Some people think this is the bottom......... its' not.

I think I insulated myself (at least with my stocks) on this. I sold half my positions over the last few weeks (will rebuy at the bottom). And I am hedging myself with some puts on some banks that I am betting will go bust.

For fun I bought some 15 dollar puts on Lehman back when it was at 33, made some money there. It was funny because I had a bar conversation in NYC with a Merril guy saying how he sees Lehman a buy every time it goes below 12 bucks.... I didn't say anything.

 

[bamacre]

Typical government "fix." Fix the problem with more of the same that caused the problem.

This is how we got into this mess. Artificially low interest rates. The Fed was pumping money into a broken market, and what does Ron Paul say? This causes malinvestment. And what are we seeing today? Government spending $700 billion on, gasp, malinvestment.

Yeah, lower the interest rates! Borrow more money! The government can just keep buying up the malinvestments!

They're digging a grave for the dollar.

 

[Pliablemoose]

Originally posted by: GTKeeper
Some people think this is the bottom......... its' not.

I tend to agree, while I applaud the provactive stance of the Fed/Treasury (relatively) and the central banks, I think we have a bit more to scrub off... Perhaps quite a bit more.

 

[Xavier434]

Whether you support the bailout or not, the idea that it was supposed to act as an overnight solution is completely ludicrous. No one will be able to provide an educated and accurate assessment in regards to how effective the bailout will be for at least 6 months and possibly even a full year from now.

Also, if anyone thinks that the bailout was supposed to be some sort of single step easy button fix then they need to reevaluate things. It is just one step of what will become a large multiple tier solution to the current multiple tier problem.

As far as the interest rate cuts are concerned, it might have a positive effect as long as it isn't blown out of proportion. Remember, lowering interest rates does not directly equate to irresponsible borrowing. It is not the same thing as they were doing before. It could lead to new similar problems, but that can be said about any solution to any problem.

 

[K1052]

Originally posted by: bamacre
Typical government "fix." Fix the problem with more of the same that caused the problem.

This is how we got into this mess. Artificially low interest rates. The Fed was pumping money into a broken market, and what does Ron Paul say? This causes malinvestment. And what are we seeing today? Government spending $700 billion on, gasp, malinvestment.

Yeah, lower the interest rates! Borrow more money! The government can just keep buying up the malinvestments!

They're digging a grave for the dollar.

The alternative is to do nothing and hold on for the ride. The Fed tried that before...didn't work out so well.

 

[bamacre]

Originally posted by: K1052

Originally posted by: bamacre
Typical government "fix." Fix the problem with more of the same that caused the problem.

This is how we got into this mess. Artificially low interest rates. The Fed was pumping money into a broken market, and what does Ron Paul say? This causes malinvestment. And what are we seeing today? Government spending $700 billion on, gasp, malinvestment.

Yeah, lower the interest rates! Borrow more money! The government can just keep buying up the malinvestments!

They're digging a grave for the dollar.

The alternative is to do nothing and hold on for the ride. The Fed tried that before...didn't work out so well.

Things aren't so wonderful in Zimbabwe either.

 

[theeedude]

Giant yawn from the market. Fed is impotent. This economy is following Japan's scenario. They cut interest rates to zero and still had their lost decade

 

[dmcowen674]

Originally posted by: Dissipate
It is clear to me that the Fed is running out of options.

The bailout plan failed to revive the markets so now it is using emergency actions to try to stave off a full scale meltdown.

Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes Dominoes

 

[StageLeft]

Now solid negative dow. It will fluctuate but I think it'll finish the day negative unless gov has another move that temporary assuages the panic.

 

[K1052]

Originally posted by: bamacre

Originally posted by: K1052

Originally posted by: bamacre
Typical government "fix." Fix the problem with more of the same that caused the problem.

This is how we got into this mess. Artificially low interest rates. The Fed was pumping money into a broken market, and what does Ron Paul say? This causes malinvestment. And what are we seeing today? Government spending $700 billion on, gasp, malinvestment.

Yeah, lower the interest rates! Borrow more money! The government can just keep buying up the malinvestments!

They're digging a grave for the dollar.

The alternative is to do nothing and hold on for the ride. The Fed tried that before...didn't work out so well.

Things aren't so wonderful in Zimbabwe either.

Because the US is totally comparable to a 3rd world economy sporting a GDP that doesn't outrank any single US state.

 

[dmcowen674]

Originally posted by: Engineer

Originally posted by: Engineer
S&P and Nasdaq futures shot through the roof initially, but have now fallen through the floor. Worst levels that I've seen this week (-50+ on the Nasdaq futures). Going to be another bloodbath.

Wow, markets dived on the open and have now went positive. Shocked.

Nope 11am and dived down 200 to 9200

But it's doing 100 point swings so where the roulette wheel lands is anyone's guess.

 

[Jaskalas]

Originally posted by: Skoorb
Now solid negative dow. It will fluctuate but I think it'll finish the day negative unless gov has another move that temporary assuages the panic.

No nation stops a global panic.

I contend that there is no action our government can take that will resolve this. Markets will have to work themselves out.