Posted on 01/22/2008 6:11:08 AM PST by Brilliant
European shares jumped into positive territory in early afternoon on Tuesday after the U.S. Federal Reserve surprised markets by slashing its benchmark interest rates by a hefty 75 basis point to 3.5 percent.
By 1327 GMT, the pan-European FTSEurofirst 300 index was up 1.4 percent at 1,298.12 points, after hitting an intraday low at 1,223.36 points, which was its lowest since Nov. 2005.
"If you know the Fed you could have expected that it would try everything to calm down the situation," said Christian Schmidt, strategist at German regional bank Helaba.
Rumours about a rate cut had lifted European indexes earlier, but the Fed had declined to comment on the rumours.
"The structural problems have not gone away though," Schmidt added. "It is too early to give the all clear."
were still going sideways to down for the next few months
so who really does control the world? It ain’t W. It ain’t Putin, and it sure as h$#@ ain’t the EU/China/India.
Can anyone explain why has the dollar stabilized over the last 30 days and why it isn’t responding to today’s Fed rate cut?
If a surprise .75 rate cut doesn’t help, I’m not sure what will. Who says the markets are rational?
I don’t see a slowdown in the construction business yet. While the markets usually proceed the actual decline, it could also be that all of the panic could be strictly financial.
Of course I worry about my stocks, but selling now could be selling at the bottom?
“The structural problems have not gone away though,”
The rate cut was a band-aid to cool things down a bit. We have some serious issues to deal with.
We have to get back to the basics of what made us strong.
Only securing cheaper energy and substantial reductions in taxes will reap long term gains.
Anything less is just a lot of hot air.
Why has it stabilized? Because a US slowdown means we won’t be importing as much, and dollars won’t be flowing out as fast.
Why hasn’t it responded to the rate cut? From what I see, it is responding. It’s down. That’s how it responds to a rate cut. When the rates go down, the assumption is that our economy will receive a boost, and we’ll buy more imports, which causes a trade imbalance, and depresses the dollar. The dollar anticipates this effect, and falls immediately.
Tell me how a rate cut help folks pay higher energy bills and the increase in property taxes from Greenspam's property bubble, and the higher food costs from higher energy and the redirection of agricutlural resources to subsidized alcohol?
I don't see how this helps anyone beside some banks that are about to go down.
You didn't get the memo.
You and I are running things, just like we've been doing for years now...
Okay! It's similar dynamics as to the price of oil.
That is an interest question, actually. What I want is for this country to face its structural problems. High flying finance has allowed the system to go on for far to long. No of course I don't literally want to see a collapse of our financial institutions, but one structural issue that has to be fixed is the kleptocracy of elites that take a major fraction of the wealth and leave the debts to the rest of the country. There are couple of real entrepreneurs, but most of these guys are cogs in a machine and not worth a gazillion times more than his best enigineers or production floor managers. I could go on and on, but I won't.
Furthermore, how does a .75pct rate cut and some quip plunge protection team action address the structural problems. They just reward them.
That is how we have handled these things, and it has worked so far--'87, 2000, 9/11, etc all came back. Now if I could just learn to sell high, there would be some ready cash for these times when stock goes on sale.
We import too much. That includes energy and a host of other things.
The rate cut addresses our imports by dropping the Dollar and thereby making imports more expensive. You've got to keep dropping the Dollar until imports stop increasing (at least!).
Building new nuclear power plants in all 50 states would also help reduce our imports and lower our energy costs.
All of the above will help keep money inside the U.S., where we recieve leverage on our Dollars so spent (money that pays a U.S. company in turn pays a U.S. salary where the U.S. worker then gets to spend that money in the U.S.), rather than sending money overseas with no leverage-wealth-effect.
My thoughts exactly!
All your markets are belong to us.
What's this "we" stuff? It's a free country and I can import anything I want. If you're messed up you can stop buying chocolate, coffee, bananas, whatever --hell, you can sit at home and not buy anything if it'll make you happy.
Just don't say that this is a "we" thing. The rest of us are fine.
“so who really does control the world”
the invisible hand getting ready for an invisible bitch slap?
A person can eat.
A person can eat too much.
But it’s a free country. Eat as much as you like.
Likewise, a country can import.
A country can import too much.
But it’s a free country. Import as much as you like.
There are consequences, however.
that’s deep.
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