3/4 of a Percentage Point!?!
nzshadow
5,518 Posts
Damn, looks like the fed is shook. Hard.From where i sit, this move is an official acknowledgment that the US economy is in serious trouble.Markets will react strongly, probably factoring in more drops in the following weeks... How long before this financial crisis affects the regular joes? not long.On both sides of the Atlantic. Shits going down.Invest in alcohol and tobacco.
Comments
and thats the problem: the financial world is based on expectations and perception, it seems at this early stage that 'panicky' is the general perception of this move.
good article on the BBC site:http://news.bbc.co.uk/2/hi/business/7202645.stm
an excerpt:
The Fed's interest move came as a complete surprise, as it was taken outside its timetabled rate-setting Open Market Committee meetings.
The last two such emergency cuts were on 17 September 2001, shortly after the attacks of 11 September, and on 3 January 2001, in the wake of the dotcom bust.
The last time the Fed cut rates as much as three-quarters of a percentage point was in August 1982, almost 26 years ago.
"This is huge," said the BBC's business editor Robert Peston.
"And it is a big risk. If this doesn't work, then people will say they have nothing left in their locker."
Analyst Jeremy Stretch of Rabobank, described the Fed's move as "a sign of panic".
What if, after the Bernanke bounce, stock markets continue to fall?
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the bernanke bounce... nice.
and for all you conspiracy buffs:
they move the announcement back, yet asian markets plummet before the announcement...
is there a leak at the fed?
the war in iraq only cost 487 billion dollars so far
Vs.
Now I can buy all kinds of shit while the price is low.
Shit is going the way of the lira.
"Hey US - we
enough of all the doomsday talk -- we'll be better by this afternoon.
If you were looking at your 401K investments on a daily/weekly basis (which most people don't) your shit (and mine) are likely taking a beating this week.
Perhaps, but if you have money just lying around its probably better to invest it in safer securities (bonds, etc.) as the market will likely be dropping, for what i expect, another few months as we grasp the recession.
just bear in mind that bonds are incredibly rich right now, so if you park your money there i would do so with the intent being to preserve capital rather than to make a longer-term play. 2-year notes are yielding just over 2% today - bear in mind that your real return would actually be negative if you take inflation into consideration, so that's pretty much where the scared money is going. it wouldn't be a bad time to start looking at some bargains out there, esp. in things like financials, if you can handle the volatility.
whose yields are going to be dropping with the interest rate.
I heard the companies that insure the bonds are taking a hit in the sub prime mess as well.
were. MBIA is up 35% this morning.
also - with treasuries flying and stocks selling, there may be some good corporate paper out there if you're looking for yields and have access to it.