I know there isn't anything the Fed can do. Stocks plummeted after they cut the rate. That's why I said it would not stop the inevitable. There many different issues here. You must deal with them individually.
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And deficit spending just digs us more in a hole. We borrow 2-3 billion dollars a day from foreign investors. There was a mass selling of stocks throughout the globe, what happens if people panic more and there is a mass exodus of the dollar? This simply isn't sustainable anymore. If they pull out, it could lead to hyper inflation. And if not, we are slaves to interest rates forever.
Last edited by Phrozenbot (2008-01-23 02:24:00)
Dun dun DUN!!!!
Central banks FTW.
thank fucking god my parents don't believe in borrowing. house is paid off, cars are all paid off, school fees paid or on a payment plan, in short, nothing goes overdue or unpaid. my dad does have a lot in the NYSE though....Spark wrote:
It does means wonders for those who are not affected directly by the impacts. Everything becomes cheaper!Kmarion wrote:
All this talk does wonderful things for consumer confidence..lol. It makes me want to go out and boost up the economy.
the only way to beat the recession is to ignore it though, isn't it? if we just buy and sell like normal won't that fix any problems?
The US Federal Reserve lowered interest rates by 75 basis points to boost the global economy, and the Australian stock market opened 300 points higher in the first 20 minutes of trading! That's almost 75% of the losses of yesterday. Thanks to the US! But of course, we're not out of the woods yet.
Firstly the Fed didn't lower the interest rate considering global economy, this was a panic reaction to buy time while they figure out what to do next.vub wrote:
The US Federal Reserve lowered interest rates by 75 basis points to boost the global economy, and the Australian stock market opened 300 points higher in the first 20 minutes of trading! That's almost 75% of the losses of yesterday. Thanks to the US! But of course, we're not out of the woods yet.
This is not just a correction, its a downward trend indicating a recession, the US stockmarket is down 10% so far this year and the rate cut today will only have a temp effect, will prolly wear off in a couple of days - Europe had a slight boost on average 2 - 3% except for Germany and Russia that had a slight negative score ... the next couple of days is vital as the US government takes a breath figuring out what to do next.
Wait behind the line ..............................................................
No of course not, the US lowered interest rates to curb a local downswing, which in turn has the effect of boosting the global economy because every body's tied up with the US economy.Varegg wrote:
Firstly the Fed didn't lower the interest rate considering global economy, this was a panic reaction to buy time while they figure out what to do next.vub wrote:
The US Federal Reserve lowered interest rates by 75 basis points to boost the global economy, and the Australian stock market opened 300 points higher in the first 20 minutes of trading! That's almost 75% of the losses of yesterday. Thanks to the US! But of course, we're not out of the woods yet.
This is not just a correction, its a downward trend indicating a recession, the US stockmarket is down 10% so far this year and the rate cut today will only have a temp effect, will prolly wear off in a couple of days - Europe had a slight boost on average 2 - 3% except for Germany and Russia that had a slight negative score ... the next couple of days is vital as the US government takes a breath figuring out what to do next.
Secondly, 0.75% interest rate decrease is ALOT. Over here, a 0.25% increase can send the market wheeling and panicking, of course such a drastic move is intended to boost the local economy. The effects may not be instant, but saying that the effects will wear off in a couple of days? I reckon you're mistaken in that regard, if you were right then monetary policy would be a complete waste of time. I'm not saying that lowering interest rates would permanently solve the problem as the US recession is not entirely due to a fall in consumer confidence, but it will have a short to medium term effect on the US, and by association, the global economy.
And lastly, I did say we weren't out of the woods yet, and the next couple of weeks will be very volatile, like you said.
The real surprise here in the US is seeing both Democrats and Republicans working together. Bi-partisan politics is what we need now more than ever.
http://news.yahoo.com/s/nm/20080122/pl_ … mulus_dc_5Reid told reporters he hoped legislation could be finished and ready for Bush's signature by mid-February.
"We talked about doing something as soon as is legislatively possible -- something that is targeted and something that is temporary in order to inject stimulus into the economy," Pelosi, a California Democrat, said as she Reid left the meeting with Bush at the White House.
"Now we see across the world that the state of the economy in the U.S. is having an impact as well. So the urgency we feel at home is now even more urgent as we see the impact of our markets on others." Pelosi said.
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I'm holding you to that one Varegg.. . The real plan is being worked on right now. Hopefully it will be out mid february (once it makes it through legislation). Asian markets are showing 75% recovery from the fall as well.Varegg wrote:
This is not just a correction, its a downward trend indicating a recession, the US stockmarket is down 10% so far this year and the rate cut today will only have a temp effect, will prolly wear off in a couple of days
http://news.yahoo.com/s/ft/20080123/bs_ … vTrAjv5rEF
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these bankers are usurers and they will burn in hell.
You're wrong. There a slight upside to inflation in terms of the redistribution of wealth across society as a whole, which means it can be risked in the short term, though no central bank would want high, continuing rates of inflation. Additionally, keeping the economy as a whole out of recession and in some kind of GDP or GNP growth, even if it's as little as 0.5% is much better than letting it fall into recession. The lowering of the interest rate by the federal reserve by 0.75% won't keep the people who can't repay their mortgages from defaulting, they still will eventually, but that's not what it was designed to do either.CameronPoe wrote:
Dun dun DUN!!!!
The economy and to some extent the stockmarket really is all about confidence, if the market begins to fall rapidly, it can quickly break through the levels of usual buying resistance that usually balance out a fall. The Federal Reserve correctly realised that if the market opened 500 or 600 points down, panic selling could quickly push it down a thousand points, or to the level where the market automatically closes to try and stem the tide. This kind of sell-off would have serious consequences across the entire economy, but it wasn't solely what the rate cut was designed to do either. The credit-crunch means that credit is harder for both very large companies and consortiums and those who take out mortgages to get. Lowering the interest rate makes taking out new loans more attractive to business owners, people taking new mortgages and companies launching takeovers, all of which have a positive effect on economic growth.
Therefore, although you can see it as a short term measure aimed at buoying the market, really it's designed ot have a positive / growth effect on the US economy as a whole, and keep it from slipping into recession.
Well, it takes two parties to do a contract. If people were more responsible we wouldn't be in this lending crisis neither. But I guess it's natural for some people to want things they can not afford.Marinejuana wrote:
these bankers are usurers and they will burn in hell.
I do however feel that the majority of the blame falls on to the lenders. Keeping credit limits inline is their business.
Xbone Stormsurgezz
not quite that simple. real estate speculators are just as much at fault along with people borrowing well beyond their means. the interest rates weren't necessarily exorbitant, people were taking on huge principals.Marinejuana wrote:
these bankers are usurers and they will burn in hell.
Do you guys realize that home values are still way above what they were before the boom of 2004? Real Estate is a limited commodity. People are still having babies, still getting married, and still relocating. Demand will catch back up. It may take a couple years of grit, and hopefully learning, but it will come back. Home sales will be down until then but remember since the demand for construction labor is low the cost of building a house has decreased (Steel gets cheaper, lumber gets cheaper..etc). All this speculation of "collapse" makes for good print. The reality is we've seen worse and survived worse.
Reciprocity, thats what underwriters are for. It's why 99% of lenders make you get an appraisal and a home inspection before you close. They have a vested interest in protecting the profitability of their companies.
Reciprocity, thats what underwriters are for. It's why 99% of lenders make you get an appraisal and a home inspection before you close. They have a vested interest in protecting the profitability of their companies.
Xbone Stormsurgezz
We can talk housing and loans and greedy bankers. Let's talk about inflation that has happened for the last 5 years that they just mentioned two days ago. You know the gas prices? Yeah they suck. They suck worse for those companies that deliver the groceries to your local grocer. SO on top of YOUR gas you have to pay for, you get to pay for theirs to. Because they pass the cost to the customer. Basic economics eh? Not sure how many people here buy their household's groceries but I'm looking at $5 dollar gallons of milk here. $7 packs of bacon. $3 a bread loaf. The housing is just the lucky scapegoat at the moment. Middle class is paying for everything and their costs of living in food, oil heating, gasoline is going up. That is why it seems like a recession. No one is buying shit and haven't been for a while. This Christmas was the lowest buying season since zombie marketing was invented. Ipod or food? The tax plan from bush with stimulate nothing. People will be paying off the debt they've been accruing that the rich people say they aren't.
This is NOT a recession. Its been a recession. Your seeing the forming of a depression. In my opinion a recession is when you tighten your belt and wait out a rough time while paying for necessities. A depression is when you can't pay for the necessities and regardless of what the administration and wall street say, people are having trouble paying for the necessities. It's hard to see that from an ivory tower though.
This is NOT a recession. Its been a recession. Your seeing the forming of a depression. In my opinion a recession is when you tighten your belt and wait out a rough time while paying for necessities. A depression is when you can't pay for the necessities and regardless of what the administration and wall street say, people are having trouble paying for the necessities. It's hard to see that from an ivory tower though.
Xbone Stormsurgezz
huh?Kmarion wrote:
Reciprocity, thats what underwriters are for. It's why 99% of lenders make you get an appraisal and a home inspection before you close. They have a vested interest in protecting the profitability of their companies.
http://en.wikipedia.org/wiki/UnderwriterReciprocity wrote:
huh?Kmarion wrote:
Reciprocity, thats what underwriters are for. It's why 99% of lenders make you get an appraisal and a home inspection before you close. They have a vested interest in protecting the profitability of their companies.
Real estate underwriting
In evaluation of a real estate loan, in addition to assessing the borrower, the property itself is scrutinized. Underwriters use the debt service coverage ratio to figure out whether the property is capable of redeeming its own value or not.
Xbone Stormsurgezz
Updates for those following.
http://finance.yahoo.com/q/bc?s=%5EDJI&t=1d
^^ should be live during trading.
http://finance.yahoo.com/q/bc?s=%5EDJI&t=1d
^^ should be live during trading.
Xbone Stormsurgezz
The sky is falling! The sky is falilng! The sky...is...fall...
Oh...wait.
Oh...wait.
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
What can I say, I hope you got in and snapped up some bargains while they were there to be had.
Watch for a similar and continuing ASX recovery today.
Watch for a similar and continuing ASX recovery today.
Last edited by <BoTM>J_Aero (2008-01-23 13:16:21)
Admit it. You pooped in your pants as well.FEOS wrote:
The sky is falling! The sky is falilng! The sky...is...fall...
Oh...wait.
Nuh uh.apollo_fi wrote:
Admit it. You pooped in your pants as well.FEOS wrote:
The sky is falling! The sky is falilng! The sky...is...fall...
Oh...wait.
I just hope interest rates stay down for the next 6 months or so.
“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular
Same here.FEOS wrote:
I just hope interest rates stay down for the next 6 months or so.