U.S. Fed Reserve cuts interest rate, Dow down forced by political & economic climate

There is always a concern about the spillover effect from energy inflation but we really haven't seen much of it in the last 5 years.

 

Interesting point on the adjustables. But it wouldn't help the people that have the teaser loans.

 

The Libor is affected by those is it not. If you state not, then you may want to show a graph that shows otherwise.

 

If you understand the basics of economy, you wont make that statement. I work for a investment bank and I can tell you what Fed is doing is not going to help US at all.

Fed is just delaying the recession after every cut. The rate cuts have short term effect and long term effect. Short term effect is to boost the sentiments, the long term effect is it absorbs the actual rate cuts in the system.

Those who believe that these rate cuts are actually going to help US economy are wrong. All liquidated money from this rate cut will be invested in asia. Look at stock markets in asia today. Its all US free money getting into the system post rate cut. Investors are gambling your hard earned money. Is that really good? No.

Now considering the pace of rate cuts, I can safely assume the rate will be floored down to 2-3% within 6 months. What that will trigger? Further inflation, lower jobs, lower income and the whole system will collapse. At this stage, FEd will increase the rates, that would eventually go to double digits like 10%. Asia falls the world falls coz they are no more competitive. However the damage is already done to US.

US will take the whole world down with it if they continue to cut rates like this. This rosy picture wont last long.

 

So how do you think asia/europe will respond to the rate cute the fed did here?

 

Both asia and europe will go up. ITs all US money coming into that markets. However this party wont last long enough.

I am shorting myself at every peak so I am good to go when the market will eventually bottom out by April/May 2008

 

The rate cut will lower home equity loan payments and some credit card payments

http://money.cnn.com/2008/01/22/new...t/index.htm?section=cnn_topstories&eref=yahoo

 

Well, it also loweres your interest rate earnings. IMO, those $500-$1000 are not gonna overshadow average loan repayments.

 

Seems like everytime bush talks it seems to help a little? ehh (judging from the past)

 

no he just talks crap anyways Ben is also another puppet of traders. If they have any serious plans to improve the current state, they would do lot more than fed rate cut. Thats like 2 yr old's brainy decision.

 

Well I at least I like how they said they will do more if needed this morning. Its like ONE GOOD DECISION w00t!

 

you seem Pro-bush huh? anyways i wish you good luck. Lets see how US economy does in this time and if this rate cut improves any situation if at all

 

I like to stay positive, but he takes too much time to do crap and the time we wait we suffer as a market. IMO

---
Anyways I would have hoped apple would get positive reports instead sends them down over 20 points! (Market in the tech sector is GETTING KILLED!)

Now we can hope for a little up from Microsoft and eBay
I remember stocks like IBM, Oracle holding up alot

 

Invest in markets with strong foreign currencies. You don't want to be caught holding US dollar assets if the currency tanks from these low rates.

 

Interest rates reductions at present are not meant to stave off a non-existent recession.. They are meant to try to correct the sub prime melt down and excessive CC debt accrued by idiots who live beyond their means.. The best way to fix that problem is let them lick their wounds, cut their losses and move on.

I wonder how many of these people in trouble are in trouble with mortgages on second or even third homes? Anyone that did not lock in 2 years ago is a moron...

If anything a freeze on variable is the only real solution. I think the fed is hoping people will lock their adjusted rates mortgages than bump up a full point or more in 6 months or so..

Oddly enough I still get these damned offers, today offering me a $500,000.00 equity loan, or 90% of my equity in my home.. Go figure... At what point will the fed tell the banks to stop being irresponsible as well?

A rate increase IMO NOW would knock off the few stragglers that are still trying to hang onto more house than they can handle..

On the flip side, now is the time for those that have cash to borrow against it at the lower rate and buy these foreclosed properties..