Posted on 01/10/2008 4:47:58 PM PST by TigerLikesRooster
Bernanke Comments Indicate Additional Rate Cuts
By Neil Irwin
Washington Post Staff Writer
Thursday, January 10, 2008; 2:39 PM
Federal Reserve Chairman Ben S. Bernanke today gave the clearest indication yet that the central bank will move aggressively to cut interest rates to try to prevent a serious economic downturn.
The Fed has cut the short-term interest rate it controls three times, for a total of one percentage point, since September, in an effort to keep a crisis in the housing and financial markets from spreading into the broader economy. In recent weeks, evidence has mounted that the economy is slowing anyway.
In a speech in Washington, Bernanke said that in light of that recent negative economic news, "additional policy easing may well be necessary." He added that Fed policymakers "stand ready to take substantive additional action as needed to support growth and provide adequate insurance against downside risks."
Stocks rose sharply shortly after noon when Bernanke's speech became public. (A news service published the text of the speech, in violation of an embargo, before Bernanke delivered it at 1 p.m.) The Dow Jones industrial average rapidly gained more than 150 points, then fell back. At 2 p.m., the Dow was up 17 points, essentially flat.
(Excerpt) Read more at washingtonpost.com ...
The Fed indicates a recession is not coming, which contradicts the earlier statement by Goldman-Sachs. Which knows better?
I guess they have to keep pumping credits in perpetuity.
Goldman Sachs doom and gloom economic forecasts lately have conventionally just preceeded major announcements by Ben. I think it is just their way of trying to influence the fed to cut.
Yeah, keep listening to your Wall Street buddies. All these guys want to see is a rally—even for a few hours so they can make millions. Bernake is playing a fools game—he will induce both hyperinflation and a recession.
Yep, Ben needs to change his nickname from ‘helicopter Ben’ to ‘chopper Ben’, especially after my dollars change to pennies in purchasing power.
We already have hyper inflation. Why else did the Fed stop publishing M3 figures _______________ ? Printing greenbacks 24/7 is not a cure for anything — it does answer a cry for help from crooked Wall Street bankers.
Recall Greenspan's famous gem that you don't know you're in a bubble until after it pops.
We are already in a recession, and it will only get worse. I can’t believe the suckers out there!!
Can you point to the indicators that say we are in a recession?
I have been in high finance all of my life. I report, you decide.
I was asking you to report.
Look, I have lived through 3 recessions. This one will be a knockout! We have 300 billion in bad paper. These people will default on their credit cards. Gas is 3+ a gallon....
you can’t be this obtuse. Stay out of the market, or short. Keep your debt down. You are either young, or not rational. I mean you no harm.
And what % of annual GDP is that? Will it all default? Will it default tomorrow or over the next 1, 3, or 5 years? How much of it will get settled? How much is hedged? How much is covered by default swaps?
I'm not trying to sound like a horses a$$ here, but I am getting sick of people tossing numbers that may or may not be accurate, are definately not placed in context, and make it sound significant. I hate to go so low on you my FRiend, but you sound like a journalist...
I remember a great quote: "The only thing we have to fear is fear itself." Right now, credit markets are pinched simply because no one knows what is lurking on each others balance sheets. Just MHO, but I think the paranoia is as overblown as the election year hyperbole. Most of what is "bad paper" is already allowed for, haircut, hedged, swapped, or able to be unwound, refi'd, or sold at a minimum hit discount over the next few months and years. Yes a few idiots will take some major lumps (i.e. Brookstreet Securities). But the vast majority of financial firms out there will come through with a couple of substandard quarters and mostly intact equity. Just my $.02 worth.
” remember a great quote: “The only thing we have to fear is fear itself.”
Yeah, I like that quote too, but America is now run by whores, and whores don’t care about anyone but themselves.
“And what % of annual GDP is that?”
Irrelevant. All markets are perception, not the bottom line.
Many of the people posting here are cheerleaders. They do not want to understand. But it is not their fault. ‘Hip - Hip - Hurray!’ is all they know.
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