[Always Right]

He already said they're going to drop 1/2 pt. at next Fed meeting (Jan 29 or 30).

He has? All I have heard is vague talk about the fed is ready to act. Besides 1/2 point cut at the meeting is too little too late. Ben needs to cut 1/2 point now, and another 1/2 point at the meeting.

[what's up]

Yes, I believe he's committed himself to it.

A week's not going to make that much difference.

[palmer]

Many small businesses that need new or renewed loans now (to get some equipment and keep their employees) can't get them, no bank wants to touch them if they are related in any way to housing or support housing-related businesses. The interest rates you are talking about lowering have no impact at that level. The second problem is unwilling borrowers. John Doe isn't going to rush out to buy overpriced real estate which has farther to fall. There are two circumstances in which he will: real estate appears to bottom out or interest rates appear to bottom out and are starting to rise. We are not close to either of those conditions.

Instead, at least these two things will happen: banks and investment houses will use their debt derivatives as collateral and get lower rates, which will ease the liquidation pressures. Second, speculation and malinvestment will continue and ultimately accelerate as the lower and lower rates will allow greater and greater carry trade opportunities. In general that will do nothing for sustained economic growth.

[BlabItGrabIt]

Ben needs to cut 1/2 point now, and another 1/2 point at the meeting.

Unfortunately, America and the world has to standby as the actual rulers have to choose our President and how they get her into office at the Davos meetings this week...