Posted on 09/16/2008 2:59:19 AM PDT by bugseye
The Dow fell 500 points in the last hour of trading today. It's about time! Fed funds futures are now pricing in an 86% chance the fed will cut rates tomorrow. Why? Because traders and investors on Wall Street want a "psychological lift" to prevent the market from falling even more. Well, too bad! The current rate is only 2% - already way too low. The Fed must sit tight at least until March of next year. The fact is, the market should have taken a dive over a year ago, but the Fed and our government have been artificially propping it up this whole time. Had our government not bailed out Bear Sterns, maybe, just maybe, reality would have set in and all these other firms would have taken action to stem their losses.
Thankfully we did not bail out Lehman Brothers. Sorry, but the American taxpayers should NOT be paying for the STUPIDITY and GREED of the banking sector. Let them go bankrupt; making the taxpayers pay for irresponsible industry practices is just unfair. As for AIG, Governor Patterson did the right thing (surprisingly) by allowing them to shift their assets. But, we do not need another bailout.
The Fed has increased liquidity to the market and even lowered the collateral required for cash loans. Firms had better start taking advantage of this, because so far they have been holding out, allowing themselves to fall further and further behind, all in anticipation of a government bailout. Well, the Free Lunches are OVER!
If the fed cuts rates tomorrow, our economy will go into an irreversible tailspin. The Dollar has finally started to level off BECAUSE rates have not been cut.
(Excerpt) Read more at nolanchart.com ...
Agree 100% with this article. I don’t think the gov’t should have provided financing for the Bear Stearns buyout, either. The Fannie and Freddie takeover was probably unavoidable, however.
There should be a deal for Fed Chairmen. We will give them tremendous power, prestige and riches while they serve, but on the day they retire, we take them and fling them off a cliff into the sea.
You would still have no problem recruiting for the position, and you would be spared confounding influence of interference by the retired Chairmen on the economy.
Cuomo did not loosen mortgage lending regulations. The requirement that lenders to give substandard loans was a tightening of lending regulations by introducing racial and income quotas.
Without this regulation, these loans would never have occurred. It is a misnomer to say these substandard loans were the result of “loosened” regulation.
You could make the same argument for President. (chuckle)
Attempting to borrow out of this morass is making things worse.
As to Greenspan, he needs to shut up and go away, and the sooner the better.
Bravo! for asserting so succinctly the truth in this matter. Last evening, I could only stomach listening to some econ talking heads for a few minutes before turning the telly off. And these were "econs" with "credentials". pffft.
One commentator disparaged President Bush as praising the fact that homeownership was up. Well, dangit, it IS up - and especially so for those who have the income and good credit to qualify for the loans. Did she make reference to this? Non! She probably follows the lefty econ logic of "separate but equal". She was obviously, deliberately ignoring the details of statistics. And she's "credentialed". snort.
Monetary policy can only go so far! Fiscal policy has been missing in action! We need to cut taxes and cut spending and let the folks keep more of their money!
And the lenders that actually followed these regulations are now “predatory”.
Then as energy costs began to escalate Greenspan thought it the perfect time to raise interest rates.
The man needs to be called out. There are those in the media who have laid this disaster at the feet of Greenspan but for the most part the rest of the LIARS in the msm are praising him because he is constantly talking down the economy and he referred to President Bush as the worst president and Bill Clinton as the best.
I’ve been posting the links to these two relative articles lately as the first is prophetic in that it was written in 1993, and the latter in July of 2008. I find them quite interesting.
http://findarticles.com/p/articles/mi_m1282/is_n25_v45/ai_14779796
http://www.freerepublic.com/focus/f-news/1965239/posts
The economy is slowing. Inflation is not out of control. Ben will cut and Ben will be right to do so.
“Bad trade deals and our national deficit fall on the hands of both Parties.”
And the final sentence of the article just dropped in with no comment. But maybe once the subprime debacle is cleaned up to the extent possible, and a few others, maybe it will begin to dawn on all the financial geniuses who caused all this that it really isn’t a good idea to enter into one trade agreement after another that does little more than move jobs out of the US and push our trade deficit higher and higher, last seen to be approaching a Trillion per year.
I agree with the article, but I’m convinced that the US economy needs a total shake-out, which is why I’d prefer to see a complete collapse. The only way that will happen is for interest rates to continue to drop, inflation to spiral out of control, and the Fed Reserve destroyed once and for all. In the meantime, reinvest in gold and silver (which has been waaay oversold lately); commodities will come roaring back. Not until the dollar is utterly devalued with the public finally understand the futility of central planning.
Greenspan is married to what’s her name. That reporter with the little body, oversized head. You know, the one that hates McCain/Palin. So you know she’s instructed bubble boy to make Republicans look bad.
Greed and fear, Chucky, 50 basis points all of us can understand, and gets the greed flowing.
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