yeah the bearish mentality seems pretty strong right now and overdue for a nice spike up....that said i think alot of people that are stuck long see the writing on the wall and are praying for a nice bounce to get out at better prices that may never come so who knows....japan not happy 375 in the hole....the rest of asia and US futures still quiet for now though.
today any wealthy individual can take $1 million and go to a prime broker and leverage this amount three times; then the resulting $4 million ($1 equity and $3 debt) can be invested in a fund of funds that will in turn leverage these $4 millions three or four times and invest them in a hedge fund; then the hedge fund will take these funds and leverage them three or four times and buy some very junior tranche of a CDO that is itself levered nine or ten times. At the end of this credit chain, the initial $1 million of equity becomes a $100 million investment out of which $99 million is debt (leverage) and only $1 million is equity. So we got an overall leverage ratio of 100 to 1. Then, even a small 1% fall in the price of the final investment (CDO) wipes out the initial capital and creates a chain of margin calls that unravel this debt house of cards. This unraveling of a Minskian Ponzi credit scheme is exactly what is happening right now in financial markets.
So combine an opaque and unregulated global financial system where moderate levels of leverage by individual investors pile up into leverage ratios of 100 plus; and add to this toxic mix investments in the most uncertain, obscure, misrated, mispriced, complex, esoteric credit derivatives (CDOs of CDOs of CDOs and the entire other alphabet of credit instruments) that no investor can properly price; then you have created a financial monster that eventually leads to uncertainty, panic, market seizure, liquidity crunch, credit crunch, systemic risk and economic hard landing. The last two asset and credit bubbles in the US – the S&L real estate bubble and bust of the late 1980s and the tech stock bubble of the late 1990s – ended up in painful recessions. The latest credit and asset bubble was much bigger: housing, mortgages, credit, private equity and LBOs, credit derivatives, corporate re-leveraging. So, the current bust and de-leveraging of the financial system is likely to lead to another painful economic hard landing.
So combine an opaque and unregulated global financial system where moderate levels of leverage by individual investors pile up into leverage ratios of 100 plus; and add to this toxic mix investments in the most uncertain, obscure, misrated, mispriced, complex, esoteric credit derivatives (CDOs of CDOs of CDOs and the entire other alphabet of credit instruments) that no investor can properly price; then you have created a financial monster that eventually leads to uncertainty, panic, market seizure, liquidity crunch, credit crunch, systemic risk and economic hard landing. The last two asset and credit bubbles in the US – the S&L real estate bubble and bust of the late 1980s and the tech stock bubble of the late 1990s – ended up in painful recessions. The latest credit and asset bubble was much bigger: housing, mortgages, credit, private equity and LBOs, credit derivatives, corporate re-leveraging. So, the current bust and de-leveraging of the financial system is likely to lead to another painful economic hard landing.
Good explaination on the fed behavior last friday really like reading hussman's articles, bright guy....think things might start to get a bit fugly in asia later tonight yen buying starting to get going more now as japan on lunch break.
full article at
http://www.hussman.net/wmc/wmc070813.htm
August 13, 2007
Hardly a Bailout
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy
The Federal Reserve did exactly what it was supposed to do on Friday.
As I've noted before, under most conditions, the Federal Reserve is irrelevant in the sense that (since the early 1990's when reserve requirements were removed on all but demand deposits) there is no longer a link between bank reserves and the volume of lending in the banking system. However, the Fed certainly has a role to play during bank runs and other crises where the demand for the monetary base soars.
That's exactly what the Fed did on Friday. Contrary to the apparent belief of investors, the Fed did not shift its policy, nor did it “bail out” the mortgage-backed securities market by “buying” them from banks.
What actually happened is that the Federal Funds rate shot to about 6% on Friday morning, and the FOMC brought it down to its target rate by entering into 3-day repurchase agreements . The banks sold securities to the Fed on Friday, and are obligated to buy them back from the Fed on Monday at the sale price, plus interest. Such open market operations are designed to ease the immediate demand for liquidity, and to give the banks and dealers more time to find buyers in the open market for the securities they are trying to liquidate.
This was not a major policy shift. Again, it was an effort to keep the Federal Funds rate at the current target of 5.25%, in the face of demand for base money that was pushing the Fed Funds rate to 6%.
These repurchase (RP) agreements fall into three increasingly broad “tranches:” 1) Treasury securities, then 2) federal agency debt, and finally 3) mortgage backed securities issued or fully guaranteed by federal agencies. “Today's RPs were of this type,” noted The Federal Reserve Bank of New York , which conducts the Fed's open market operations. So the Fed was not taking in the toxic, leveraged, exotic stuff.
Economist Steven Cecchetti concurs, “A quick look at the history of these temporary open market operations shows that they have been taking mortgage-backed securities as collateral for repo for some time. The quantities have normally been small (between $100 mil and $2 bil) but they have been doing it. So this is not what I would call an ‘intervention in the mortgage-backed securities market.' And it is not unusual.”
Now, the size of the operation ($38 billion) was unusual, as was the scale with which the Fed allowed dealers to submit mortgage-backed securities as collateral, rather than simply Treasury and agency securities. My impression is that in doing so, the Fed had no intent of “bailing out” the mortgage backed market, or of creating a huge “moral hazard” by absorbing losses for the irresponsible behavior of lenders. Rather, the Fed had to allow submission of mortgage-backed securities because that's what the banks actually own, and it's precisely the collateral for which the banks can't find a buyer.
Look at Treasury bill yields – they're dropping sharply again because investors are scrambling for default-free securities as a safe haven. Banks and dealers have no problem selling those puppies on the open market, so there's no reason to enter a Fed repo to do it. But banks have drawers full of the mortgage-backed stuff that they can't get rid of, so the Fed bought them more time by allowing them to post those securities as collateral for 3 days. Most likely, the Fed will have to do it again on Monday, but in any event, these are not securities that are going into the “investments” column of the Fed's balance sheet. They are simply collateral taken for short-term credit extended. The Fed does not assume a risk of loss unless the bank defaults on the repurchase agreement with the Fed (whether the mortgages underlying the collateral go belly up is of secondary importance, because it is relevant only if the bank is already in default, and at that point, believe me, we've got bigger problems).
A few interesting details – in the midst of Friday morning's panic, banks would have liked to have done more. At the 8:25 AM operation, $31 billion of securities were submitted by the banks for repo, and $19 billion were accepted by the Fed. At 10:55 AM, $41 billion were submitted, and just $16 billion were accepted. But by 1:50 PM, the scramble for funds had eased somewhat - $11 billion were submitted, and $3 billion were accepted.
Given that about $1.4 trillion of interest-only adjustable-rate mortgages were issued in 2005 and 2006, and hundreds of billions in sub-prime mortgages are already delinquent, a $38 billion repurchase operation by the Fed, where the securities posted as collateral have to be bought back by the banks unless the banks default, is hardly a “rescue operation.”
The Fed has an interest in stabilizing the banking system and the real economy. It has no interest in taking the private sector's loss for the irresponsible lending practices of recent years, nor in saving overly aggressive hedge funds from the losses on their leveraged bets. Again, the Fed did exactly what it was supposed to do on Friday. There will inevitably be enormous losses taken as a result of mortgage defaults – but don't assume it will be the Fed that takes them.
full article at
http://www.hussman.net/wmc/wmc070813.htm
August 13, 2007
Hardly a Bailout
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy
The Federal Reserve did exactly what it was supposed to do on Friday.
As I've noted before, under most conditions, the Federal Reserve is irrelevant in the sense that (since the early 1990's when reserve requirements were removed on all but demand deposits) there is no longer a link between bank reserves and the volume of lending in the banking system. However, the Fed certainly has a role to play during bank runs and other crises where the demand for the monetary base soars.
That's exactly what the Fed did on Friday. Contrary to the apparent belief of investors, the Fed did not shift its policy, nor did it “bail out” the mortgage-backed securities market by “buying” them from banks.
What actually happened is that the Federal Funds rate shot to about 6% on Friday morning, and the FOMC brought it down to its target rate by entering into 3-day repurchase agreements . The banks sold securities to the Fed on Friday, and are obligated to buy them back from the Fed on Monday at the sale price, plus interest. Such open market operations are designed to ease the immediate demand for liquidity, and to give the banks and dealers more time to find buyers in the open market for the securities they are trying to liquidate.
This was not a major policy shift. Again, it was an effort to keep the Federal Funds rate at the current target of 5.25%, in the face of demand for base money that was pushing the Fed Funds rate to 6%.
These repurchase (RP) agreements fall into three increasingly broad “tranches:” 1) Treasury securities, then 2) federal agency debt, and finally 3) mortgage backed securities issued or fully guaranteed by federal agencies. “Today's RPs were of this type,” noted The Federal Reserve Bank of New York , which conducts the Fed's open market operations. So the Fed was not taking in the toxic, leveraged, exotic stuff.
Economist Steven Cecchetti concurs, “A quick look at the history of these temporary open market operations shows that they have been taking mortgage-backed securities as collateral for repo for some time. The quantities have normally been small (between $100 mil and $2 bil) but they have been doing it. So this is not what I would call an ‘intervention in the mortgage-backed securities market.' And it is not unusual.”
Now, the size of the operation ($38 billion) was unusual, as was the scale with which the Fed allowed dealers to submit mortgage-backed securities as collateral, rather than simply Treasury and agency securities. My impression is that in doing so, the Fed had no intent of “bailing out” the mortgage backed market, or of creating a huge “moral hazard” by absorbing losses for the irresponsible behavior of lenders. Rather, the Fed had to allow submission of mortgage-backed securities because that's what the banks actually own, and it's precisely the collateral for which the banks can't find a buyer.
Look at Treasury bill yields – they're dropping sharply again because investors are scrambling for default-free securities as a safe haven. Banks and dealers have no problem selling those puppies on the open market, so there's no reason to enter a Fed repo to do it. But banks have drawers full of the mortgage-backed stuff that they can't get rid of, so the Fed bought them more time by allowing them to post those securities as collateral for 3 days. Most likely, the Fed will have to do it again on Monday, but in any event, these are not securities that are going into the “investments” column of the Fed's balance sheet. They are simply collateral taken for short-term credit extended. The Fed does not assume a risk of loss unless the bank defaults on the repurchase agreement with the Fed (whether the mortgages underlying the collateral go belly up is of secondary importance, because it is relevant only if the bank is already in default, and at that point, believe me, we've got bigger problems).
A few interesting details – in the midst of Friday morning's panic, banks would have liked to have done more. At the 8:25 AM operation, $31 billion of securities were submitted by the banks for repo, and $19 billion were accepted by the Fed. At 10:55 AM, $41 billion were submitted, and just $16 billion were accepted. But by 1:50 PM, the scramble for funds had eased somewhat - $11 billion were submitted, and $3 billion were accepted.
Given that about $1.4 trillion of interest-only adjustable-rate mortgages were issued in 2005 and 2006, and hundreds of billions in sub-prime mortgages are already delinquent, a $38 billion repurchase operation by the Fed, where the securities posted as collateral have to be bought back by the banks unless the banks default, is hardly a “rescue operation.”
The Fed has an interest in stabilizing the banking system and the real economy. It has no interest in taking the private sector's loss for the irresponsible lending practices of recent years, nor in saving overly aggressive hedge funds from the losses on their leveraged bets. Again, the Fed did exactly what it was supposed to do on Friday. There will inevitably be enormous losses taken as a result of mortgage defaults – but don't assume it will be the Fed that takes them.
On the other hand the australian central bank has no problems with intervention....starting to think we might have an asian currency crisis part deux on our hands unfortunately the US isn't in the infancy stages of a tech bubble like it was in 1997.
---------------------------------------------------------
Australian Central Bank Intervenes Amid Currency Rout (Update1)
Aug. 17 (Bloomberg) -- Australia's central bank intervened in the foreign-exchange market for the first time in six years after the currency had its steepest weekly slump since it was allowed to trade freely in 1983.
Financial markets have become ``extremely skittish,'' central bank Governor Glenn Stevens told a parliamentary committee on Queensland's Gold Coast today. A bank spokesman said earlier the bank had ``dealt in thin and disorderly foreign-exchange markets last night to restore some liquidity.''
Australia's dollar has tumbled 10 percent this week as investors cut holdings in higher-yielding assets bought with borrowed money from Japan. Central banks injected $290 billion into money markets last week on concern access to credit would dry up amid U.S. subprime mortgage losses. The Bank of Japan added 1.2 trillion yen ($10.5 billion) today.
``It's essential that financial markets continue to function,'' said Robert Rennie, chief currency strategist at Westpac Banking Corp in Sydney. ``It's important that central banks try to restore calm and stop markets from breaking down.''
The yen has strengthened at least 4 percent against all 16 most-active currencies this week as a global rout in equities and emerging-market assets spurred investors to exit so-called carry trades. New Zealand's dollar declined the most, set for the largest weekly loss since December 1985.
`Absolute Meltdown'
``It's been an absolute meltdown,'' said Paul Milton, chief dealer at Societe Generale SA in Sydney. ``I've not seen that sort of move since the Asian crisis. Below 81.50 cents, the Australian dollar didn't have any liquidity.''
The Australian dollar traded at 79.15 U.S. cents as of 10:56 a.m. in Sydney compared with 78.68 late in Asia yesterday. The currency has slumped 6.2 percent this week from 84.43 cents late in New York Aug. 10. Against the yen, it was at 90.14 from 99.96 at the start of the week.
``Sometimes, the ensuing retreat can go too far, resulting in a widespread withdrawal from the provision of credit that unnecessarily crimps the pace of economic expansion,'' Governor Stevens said today. ``We will, therefore, have to continue to watch carefully how this unfolds.''
Asian stocks fell today, extending a slump in global equities on concern the global credit crunch will stunt economic growth and erode corporate earnings. The Morgan Stanley Capital International Asia-Pacific Index declined 0.5 percent at 10:22 a.m. in Tokyo, for a four-day slump of 5.2 percent.
Margin Requirements
ME Group Inc., the world's largest futures exchange, yesterday increased margin requirements on some currency, interest-rate and stock-index contracts to reduce the risk that leverage will fuel losses amid financial-market instability.
The Bank of Japan, which added 1.2 trillion yen to the money market today, has conducted daily injections greater than 1 trillion yen a total of 10 times this year. It injected 1 trillion yen on Aug. 10 after the U.S Federal Reserve and the European Central Bank added more than $100 billion of funds.
Japan's top currency official, Naoyuki Shinohara, said he's closely watching foreign-exchange movements after the yen strengthened, Dow Jones reported.
``So far this isn't the disorderly unwinding of the carry trade the Bank of Japan's been worried about,'' said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo. ``The Ministry of Finance will take a wait-and-see stance unless the yen goes below 110'' against the dollar.
Yen's Gains
The yen climbed to 113.14 against the dollar from 113.89 late in New York yesterday, when it earlier touched 112.01, the strongest since June 2006.
Australia's central bank added A$3.87 billion ($3.05 billion) to the financial system. It has injected more than A$3 billion only three times this year, all since Aug. 10.
Singapore's domestic money and foreign-exchange markets are functioning normally and there isn't a need for ``extraordinary operations'' from the central bank, the Monetary Authority of Singapore said today.
The central bank will ``stand ready to act if the situation warrants,'' it said in an e-mailed statement.
South Korea's won is ``returning to normal'' the central bank's top currency official said.
``The won, which has been highly overvalued, is in the process of returning to normal,'' Ahn Byung Chan, director general of the Bank of Korea's international bureau, said in an interview in Seoul today. ``The market is operating smoothly.''
The won fell 1.6 percent this week to 947 per dollar as of 9:29 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd.
Taiwan's central bank said it will supply sufficient liquidity and the island's dollar remains ``relatively stable.''
---------------------------------------------------------
Australian Central Bank Intervenes Amid Currency Rout (Update1)
Aug. 17 (Bloomberg) -- Australia's central bank intervened in the foreign-exchange market for the first time in six years after the currency had its steepest weekly slump since it was allowed to trade freely in 1983.
Financial markets have become ``extremely skittish,'' central bank Governor Glenn Stevens told a parliamentary committee on Queensland's Gold Coast today. A bank spokesman said earlier the bank had ``dealt in thin and disorderly foreign-exchange markets last night to restore some liquidity.''
Australia's dollar has tumbled 10 percent this week as investors cut holdings in higher-yielding assets bought with borrowed money from Japan. Central banks injected $290 billion into money markets last week on concern access to credit would dry up amid U.S. subprime mortgage losses. The Bank of Japan added 1.2 trillion yen ($10.5 billion) today.
``It's essential that financial markets continue to function,'' said Robert Rennie, chief currency strategist at Westpac Banking Corp in Sydney. ``It's important that central banks try to restore calm and stop markets from breaking down.''
The yen has strengthened at least 4 percent against all 16 most-active currencies this week as a global rout in equities and emerging-market assets spurred investors to exit so-called carry trades. New Zealand's dollar declined the most, set for the largest weekly loss since December 1985.
`Absolute Meltdown'
``It's been an absolute meltdown,'' said Paul Milton, chief dealer at Societe Generale SA in Sydney. ``I've not seen that sort of move since the Asian crisis. Below 81.50 cents, the Australian dollar didn't have any liquidity.''
The Australian dollar traded at 79.15 U.S. cents as of 10:56 a.m. in Sydney compared with 78.68 late in Asia yesterday. The currency has slumped 6.2 percent this week from 84.43 cents late in New York Aug. 10. Against the yen, it was at 90.14 from 99.96 at the start of the week.
``Sometimes, the ensuing retreat can go too far, resulting in a widespread withdrawal from the provision of credit that unnecessarily crimps the pace of economic expansion,'' Governor Stevens said today. ``We will, therefore, have to continue to watch carefully how this unfolds.''
Asian stocks fell today, extending a slump in global equities on concern the global credit crunch will stunt economic growth and erode corporate earnings. The Morgan Stanley Capital International Asia-Pacific Index declined 0.5 percent at 10:22 a.m. in Tokyo, for a four-day slump of 5.2 percent.
Margin Requirements
ME Group Inc., the world's largest futures exchange, yesterday increased margin requirements on some currency, interest-rate and stock-index contracts to reduce the risk that leverage will fuel losses amid financial-market instability.
The Bank of Japan, which added 1.2 trillion yen to the money market today, has conducted daily injections greater than 1 trillion yen a total of 10 times this year. It injected 1 trillion yen on Aug. 10 after the U.S Federal Reserve and the European Central Bank added more than $100 billion of funds.
Japan's top currency official, Naoyuki Shinohara, said he's closely watching foreign-exchange movements after the yen strengthened, Dow Jones reported.
``So far this isn't the disorderly unwinding of the carry trade the Bank of Japan's been worried about,'' said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo. ``The Ministry of Finance will take a wait-and-see stance unless the yen goes below 110'' against the dollar.
Yen's Gains
The yen climbed to 113.14 against the dollar from 113.89 late in New York yesterday, when it earlier touched 112.01, the strongest since June 2006.
Australia's central bank added A$3.87 billion ($3.05 billion) to the financial system. It has injected more than A$3 billion only three times this year, all since Aug. 10.
Singapore's domestic money and foreign-exchange markets are functioning normally and there isn't a need for ``extraordinary operations'' from the central bank, the Monetary Authority of Singapore said today.
The central bank will ``stand ready to act if the situation warrants,'' it said in an e-mailed statement.
South Korea's won is ``returning to normal'' the central bank's top currency official said.
``The won, which has been highly overvalued, is in the process of returning to normal,'' Ahn Byung Chan, director general of the Bank of Korea's international bureau, said in an interview in Seoul today. ``The market is operating smoothly.''
The won fell 1.6 percent this week to 947 per dollar as of 9:29 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd.
Taiwan's central bank said it will supply sufficient liquidity and the island's dollar remains ``relatively stable.''
Night all, japan down 867.....
Ground control to Major Tom Ground control to Major Tom:
Take your protein pills and put your [crash] helmet on
Ground control to Major Tom: Commencing countdown engine's on
Check ig-nition and may God's love be with you
This is ground control to Major Tom, you've really made the grade!
And the papers want to know whose shirts you wear,
Now it's time to leave the capsule if you dare
This is Major Tom to ground con-trol, I'm stepping through the door
And I'm floating in the most peculiar way
And the stars look very difeerent today
For here am I sitting in a tin can, far above the world
Planet Earth is blue and there's nothing I can do
BRIDGE
Though I'm passed one hundred thousand miles, I'm feeling very still
And I think my spaceship knows which way to go,
tell my wife I love her very much she knows
Ground control to Major Tom:
Your circuit's dead, there's something wong.
Can you hear me Major Tom?
Can you hear me Major Tom?
Can you hear me Major Tom? Can you ...
Here am I floating round my tin can, far above the moon
Planet Earth is blue and there's nothing I can do
Ground control to Major Tom Ground control to Major Tom:
Take your protein pills and put your [crash] helmet on
Ground control to Major Tom: Commencing countdown engine's on
Check ig-nition and may God's love be with you
This is ground control to Major Tom, you've really made the grade!
And the papers want to know whose shirts you wear,
Now it's time to leave the capsule if you dare
This is Major Tom to ground con-trol, I'm stepping through the door
And I'm floating in the most peculiar way
And the stars look very difeerent today
For here am I sitting in a tin can, far above the world
Planet Earth is blue and there's nothing I can do
BRIDGE
Though I'm passed one hundred thousand miles, I'm feeling very still
And I think my spaceship knows which way to go,
tell my wife I love her very much she knows
Ground control to Major Tom:
Your circuit's dead, there's something wong.
Can you hear me Major Tom?
Can you hear me Major Tom?
Can you hear me Major Tom? Can you ...
Here am I floating round my tin can, far above the moon
Planet Earth is blue and there's nothing I can do
Fed Cuts Discount Rate to 5.75% to Ease Credit Crunch (Update1)
By Scott Lanman and Brendan Murray
<!-- WARNING: #foreach: $wnstory.ATTS: null at /bb/data/web/templates/webmacro_en/20601087.wm:257.19 --> Aug. 17 (Bloomberg) -- The Federal Reserve unexpectedly cut its discount rate and said it's prepared to take further action to ``mitigate'' damage to the economy from the rout in global credit markets.
The central bank reduced the rate at which it makes direct loans to banks by 0.5 percentage point to 5.75 percent. Policy makers kept their benchmark federal funds rate target unchanged at 5.25 percent. It's the first reduction in borrowing costs between scheduled meetings of the Federal Open Market Committee since 2001 and Ben S. Bernanke's first as Fed chairman.
``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward,'' the central bank's Federal Open Market Committee said in a statement released in Washington. ``The downside risks have increased appreciably.''
In the statement, the committee said it is ``prepared to act as needed to mitigate the adverse effects on the economy arising from disruptions in financial markets.''
European Stocks Rally After Federal Reserve Cuts Discount Rate
By Adria Cimino
Aug. 17 (Bloomberg) -- European stocks jumped the most in four years after the U.S. Federal Reserve cut its discount rate and said it's prepared to take further actions to ``mitigate'' damage to the economy from a rout in global credit markets.
``This is good news for stocks,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees $26 billion. ``This provides more liquidity to a market that needs it terribly. It's a bowl of oxygen to those who couldn't refinance.''
Nokia Oyj, Deutsche Bank AG and Societe Generale SA led the advance.
The Dow Jones Stoxx 600 Index jumped 3 percent to 363.05 as of 1:36 p.m. in London, the biggest gain since April 2003. The Stoxx 50 advanced 2 percent, while the Euro Stoxx 50, a measure for the euro region, gained 2.6 percent.
:drink:
By Scott Lanman and Brendan Murray
<!-- WARNING: #foreach: $wnstory.ATTS: null at /bb/data/web/templates/webmacro_en/20601087.wm:257.19 --> Aug. 17 (Bloomberg) -- The Federal Reserve unexpectedly cut its discount rate and said it's prepared to take further action to ``mitigate'' damage to the economy from the rout in global credit markets.
The central bank reduced the rate at which it makes direct loans to banks by 0.5 percentage point to 5.75 percent. Policy makers kept their benchmark federal funds rate target unchanged at 5.25 percent. It's the first reduction in borrowing costs between scheduled meetings of the Federal Open Market Committee since 2001 and Ben S. Bernanke's first as Fed chairman.
``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward,'' the central bank's Federal Open Market Committee said in a statement released in Washington. ``The downside risks have increased appreciably.''
In the statement, the committee said it is ``prepared to act as needed to mitigate the adverse effects on the economy arising from disruptions in financial markets.''
European Stocks Rally After Federal Reserve Cuts Discount Rate
By Adria Cimino
Aug. 17 (Bloomberg) -- European stocks jumped the most in four years after the U.S. Federal Reserve cut its discount rate and said it's prepared to take further actions to ``mitigate'' damage to the economy from a rout in global credit markets.
``This is good news for stocks,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees $26 billion. ``This provides more liquidity to a market that needs it terribly. It's a bowl of oxygen to those who couldn't refinance.''
Nokia Oyj, Deutsche Bank AG and Societe Generale SA led the advance.
The Dow Jones Stoxx 600 Index jumped 3 percent to 363.05 as of 1:36 p.m. in London, the biggest gain since April 2003. The Stoxx 50 advanced 2 percent, while the Euro Stoxx 50, a measure for the euro region, gained 2.6 percent.
:drink:
No reason to get all that excited about todays action thus far.
The high of the day was the opening, so anyone that jumped in right away buying has a hole in their pocket.
They can short term put band aids on things, but the fundamentals havent changed and this isnt going to turn around real estate.
All this does is it rearranges the chairs on the titanic.
The high of the day was the opening, so anyone that jumped in right away buying has a hole in their pocket.
They can short term put band aids on things, but the fundamentals havent changed and this isnt going to turn around real estate.
All this does is it rearranges the chairs on the titanic.
Well the fed did make these blackballed lenders sweat it out, as they should of, don't ya think. I hope that these mortgage companies have learned a valuable lesson these past few months and don't circum to the evil and selfish intentions of Jesse Jackson and Al Sharpton again.
True conservatives have been teaching and preaching to the country that the Revernd Al and the Revernd Jesse will like nothing more than to squeeze this country financially, to leech off corporations by any means necessary to cripple the US economy, all in the name of Black Pride. These reverends have race baited to the point of causing an economic crisis in this country and we haven't even had to start paying reparations as of yet.
Bailing out corporatations who were stupid enough to give in to the justice brothers evil intentions could have been avoided although we would have never healed the racial tensions. haha
Yesterday, I happened to catch a little Rush Limbaugh during lunch break and he strongly urged many of his ditto heads to jump into the market. Woof is good, very good. Cramer is good, very good. Rush is the best.
I can only hope that no company or political organization give into to the justice brothers evil schemes again. I can only hope that the democratic party will look at these scoundrels and choose to disassociate themselves from them. I can only hope that political organizations will never cater to the black vote again. I have a hope that Fred Thompson will be stepping on some sensitive toes!
True conservatives have been teaching and preaching to the country that the Revernd Al and the Revernd Jesse will like nothing more than to squeeze this country financially, to leech off corporations by any means necessary to cripple the US economy, all in the name of Black Pride. These reverends have race baited to the point of causing an economic crisis in this country and we haven't even had to start paying reparations as of yet.
Bailing out corporatations who were stupid enough to give in to the justice brothers evil intentions could have been avoided although we would have never healed the racial tensions. haha
Yesterday, I happened to catch a little Rush Limbaugh during lunch break and he strongly urged many of his ditto heads to jump into the market. Woof is good, very good. Cramer is good, very good. Rush is the best.
I can only hope that no company or political organization give into to the justice brothers evil schemes again. I can only hope that the democratic party will look at these scoundrels and choose to disassociate themselves from them. I can only hope that political organizations will never cater to the black vote again. I have a hope that Fred Thompson will be stepping on some sensitive toes!
Exactly!!
As of right now the market is up 125 points. If i had a tradesports account i would be betting the dow to finish down as a nice plus money dog. No way this ends up on the day.Would not be suprised to se a triple digit loss when all said and done.The Titantic is definitely sinking and uncle Benny know it.
LOL, excited here? Cynically reserved.
The band aid approach is to appease the masses. Until they hone up and really tell the truth about the state of the economy (as if they'd ever, politicians you know, as well as all the lackey's spinning on TV), I'll stay in retreat mode.
Guns, gold, ammo and jugs my bruthahs.
Wow look out below already cutting discount rates guess after the tankorama in japan they figured they better get a move on things. Gotta intervene here and there on the way down to patch up the flood gates so the big boyz can dump this garbage on the masses
