All Posts Tagged With: "Fed Rate Cuts"
Markets Plunge on Costly Credit, Paulson to Buy Bank Shares, IMF Warns of Global Recession
Global markets had deep sell-offs yesterday (Tuesday) as short-term credit markets remained tight, with the three-month lending rate for banks hitting a yearly high.
Chuck Butler: A New Trading Theme
How about those wily veteran central bankers? They all got together and decided to cut rates. The Reserve Bank of Australia (RBA) went first with their 100 BPS cut, and opened the rate cut sea for the rest of the central banks around the world. The European Central Bank, The Riksbank (Sweden), Swiss National Bank, Bank of Canada, Bank of England, and the Bank of China all lined up at the rate cut table. The Bank of Japan, The Norges Bank (Norway), and Reserve Bank of New Zealand did not participate.
Federal Reserve Joins Central Banks Around the World in Cutting Rates, but Is It Too Late?
Central banks around the world yesterday (Wednesday) announced a coordinated reduction of their respective interest rates in a bid to restore investor confidence and put an end to the worst market rout since the Depression era. However, analysts and investors alike are skeptical that even the largest coordinated effort by central banks since Sept. 11 will be enough to save the economy from a severe recession.
Coordinated Central Bank Rate Cuts!
Yen trades to 98! Carry Trades unwinding hurt high yielders… Gold rallies back to $900! Central Bank rate cuts…. And Now… Today’s Pfennig!
3 Reasons Why a Recession Is Inevitable
The feds are pulling out all the stops to end the rout in financial markets. On top of the Hank Paulson’s pork-laden bailout bill, the Fed is pumping hundreds of billions into the global financial system. It has even started buying up short-term commercial paper.
Today, the Fed joined other major central banks in a surprise and unprecedented coordinated rate cut. Still, US stocks open sharply lower.
William Patalon III says the Americans “have less money to spend … and are spending more for less.” He gives three reasons why the US is plunging into recession.
Early Indicators: Global Rate Cut
– As rumored, the world’s central banks have announced a coordinated rate cut to try to juice up the frozen credit markets. The Fed has cut its key lending rate by a half point to 1.5%. The European Central Bank trimmed cut its key rate to 3.75% from 4.25%. The Bank of England cut its key rate to 4.5% from 5%.
– According to a joint statement by the participating banks, “inflationary pressures have started to moderate in a number of countries, partly reflecting a marked decline in energy and other commodity prices,” while “the recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability.”
Bailout Bill Means ‘Massive State-Sponsored Inflation’
Dan Denning says the bailout bill that just passed Congress is a recipe for “massive inflation.” In 1931, during the Great Depression, it was a different story. Back then, treasury secretary Andrew Mellon told Herbert Hoover: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system.”
Early Indicators: Senate Passes Bailout… Stocks Slip
– The Senate has passed a modified version of the $700 billion bailout bill Congress shot down on Monday. The bill passed 74 to 25.
– The bill passed by the Senate includes provisions to increase the FDIC’s bank deposit insurance limits and a $150.5 billion package tax cuts.
– Despite the passing of the bill in the upper house, US stock futures slipped this morning. MarketWatch reports that “S&P 500 futures fell 9.9 points to 1,158.50 and Nasdaq 100 futures dropped 5.5 points to 1,573.25. Dow industrial futures dropped 71 points.”
Why US Dollar and T-Bonds Are Biggest Losers in Bailout Plan
Any celebrations over this government bailout (if it gets passed) will be short lived, says Russell McDougal at Investor’s Daily Edge. The $700 billion plan will merely reinforce the fraudulent status quo in US money markets. And that means it will merely postpone the inevitable day of reckoning. Russell says this is a “disastrous long-term strategy” that will eventually wipe out the US dollar and Treasury bonds.
No to the Bailout Means Bernanke Will Crank Up the Printing Press
The $700 billion bailout is dead in the water. For now. Does this save working American’s tax dollars? Not according to Taipan Daily editor Justice Litle. In the absence of a bailout passing into law, Bernanke & Co will simply crank up the printing press and try to inflate the problem away. This is taxation by another means. It just doesn’t feel like it.
Latest News
- Why Smart Investors Should Be Thinking about Cows11:42am CDT
- Why Energy and Resource Plays Will Profit in the Long Term10:41am CDT
- Some Very Healthy Resource Stocks Are ‘Shockingly’ Cheap10:20am CDT
- How to Play the Sovereign Wealth Fund Property Boom9:26am CDT
- Early Indicators: Europe Acts to Rescue Banks… Stocks Up…9:19am CDT
- Nouriel Roubini: Markets Will Fall Another 20%5:55pm CDT
- Goerge Soros: Financial Crisis Is the ‘End of an Era’1:48pm CDT
- Government Rescues Will Trigger a Bull Market in Gold11:22am CDT
- Natural Gas and Water Are the Investments of the Future2:41pm CDT
- J. Cristoph Amberger Says Buy Ford, Alon, GE, GM and GM Now11:00am CDT
- Get Ready for a Big Bear Market Bounce10:31am CDT
- Italy Shores Up Banking Sector as Recession Looms10:14am CDT
- Markets Plunge on Costly Credit, Paulson to Buy Bank Shares, IMF Warns of Global Recession10:09am CDT
- Why the Dow’s 40% Nosedive May Turn Into a Safe Landing10:01am CDT
- IBM Bucks Earnings Trend as Tech-Sector Stocks Trade Down to Bargain Levels9:55am CDT
- Andrew Snyder Says Potash Corp (POT) Still Has Further to Fall9:27am CDT
- Global Investing Roundups Friday, October 10th, 20089:14am CDT
- Early Indicators: Dow 5,000?8:18am CDT
- Chuck Butler: A New Trading Theme5:31pm CDT