Posted on 09/18/2007 2:43:25 PM PDT by Always Right
Stocks Soar After Fed's Bigger-Than-Expected Half-Point Cut in Interest Rates
NEW YORK (AP) -- A jubilant Wall Street barreled higher Tuesday after the Federal Reserve cut its benchmark interest rate by a larger-than-expected half percentage point. The Dow Jones industrial average reacted by surging 335 points -- its biggest one-day point jump in nearly five years.
(Excerpt) Read more at biz.yahoo.com ...
Well of course stocks soared. Who wants to hold dollars when the dollar is being incinerated to bail out the bulge bracket investment banks and deadbeats who can’t afford the mortgages they agreed to repay?
Fabulous news. Oil soars, gold soars. Dollar tanks. We are all happy as clams.
Oil would soar even if the CEO of BP America woke up tomorrow morning with a shiny new refinery and oil well in his backyard.
Who will have any dollars if 50% of the population can’t sell their homes and 20% have no jobs due to the worldwide depression that could have resulted had liquidity not been injected?
I am happy. Homebuiders are happy. Banks are happy. Homeowners are happy. Stock investors are happy. Lots of happy folks.
Some people don't understand how tightening money supply and raising rates were the real cause of the Great Depression.
More like gold holds it value, oil holds its value, stocks hold their value, dollar tanks. The commodities really aren't going anywhere, it just takes more increasingly worthless dollars to buy them.
say hello to $100 oil
At least we will have jobs to pay for the $100 oil.
Damned economy.
Which jobs? These cuts will not turn around the housing market which still has 2-3 years to deflate.
http://globaleconomicanalysis.blogspot.com/2007/09/righting-economic-ship.html
Bank of America (BAC) and Wells Fargo (WFC) both lowered their prime rate to 7.75% from 8.25%. In other words they have given up 100% of benefit of the drop in rates by passing it all on. But how many qualify for the prime rate, and more to the point who really wants to borrow in a clearly slowing economy unless they have to?
It’s going to take a lot more than 50 basis points to “right the ship”. And the ship I am talking about is the economy not just homebuilders. besides, the medicine is wrong. It was panic moves by Greenspan (with Bernanke voting with Greenspan every time), that created the credit bubble. Panic moves to lower interest rates can hardly be the cure. Bernanke has proven the inability to distinguish problem from solution. I talked about this in Bernanke Proves he is a Complete Fool.
Micromanagement by the Fed in response to every economic ill just creates bigger and bigger bubbles until it all blows sky high. It’s high time to abolish the Fed an give the free market a chance.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
Abolish the Fed? If so, then we wouldn’t have this discussion. Since it hasn’t been abolished, I’m thankful they cut the federal funds rate.
MINORITIES AND WOMEN HIT HARDEST
Make your jokes. Just means more gold for me and the rest of these nutjobs to buy. You’ll be sorry when you really NEED some gold, but we already own all of it...
I made good money off of gold too. It was a great day all the way around.
Hey no fair. You can't understand the fundamental need for a rate cute AND make money off of gold...
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