Fed and ECB announce half point cut in interest rates

CNN ^

[TigerLikesRooster]

World's leading economies -- led by U.S. Federal Reserve and European Central Bank -- announce half point cut in interest rates.

[TigerLikesRooster]

From the ticker

[NRG1973]

Past interest rate cuts have only mollified the market for a few days at the most. I wonder how long this rate cut will mollify the markets?

[DB]

So easy money is the solution to an easy money problem?

[NRG1973]

So easy money is the solution to an easy money problem? The sad thing about the interest rate cuts is their affect on retirees and savers who have a lot of their money in CD's and money markets. They are paying twice for this scandal...once with the $700 billion bailout and twice with the reduced interst rate on their life savings. What a mess!!!

[Notary Sojac]

Yep, and a big dose of heroin shot right into the vena cava is good for curing a junkie, too.

[Notary Sojac]

Savers are the enemy of the "new economy".

Only borrowers and spenders are good for America.

Please get with the program, Citizen!

[ConservativeGreek]

wonder how long this rate cut will mollify the markets?

Global Rate cut will be welcomed. Should have a solid rise
today.

[snowsislander]

I would be unsurprised to see outright buys of preferred stock as a recapitalization mechanism.

I would also be unsurprised if we eventually see negative interest rates in order to pump up the banks.

[Perdogg]

premarket DJIA as of 7:53 +125

[savedbygrace]

Negative interest rates? Has that ever happened? How would that work?

Serious questions, because I’ve never heard of this.

[ovrtaxt]

They pay us to borrow money I guess. Whatever... now it’s just getting stupid.

[NRG1973]

Global Rate cut will be welcomed. Should have a solid rise today.

[M203M4]

It all goes back to the Keynes doctrine - saving is evil, it is more "efficient" for people to spend their money ASAP, borrow more ASAP (as much as they can secure), and then rely on the government to cover their butts later. And their math is sound (except that the plan is structured such that eventually the whole thing has to collapse unless enormous population growth can be sustained - "we are all dead in the long run" is the wittiest of their rebuttals, so at least they recognize this obvious deficiency, but don't care). It is actually worse than the concept of using a sequence of ever newer credit cards to pay off previous credit cards - because here, the credit limit keeps skyrocketing automatically. Everyone can see on paper that the idea could work "forever" given a few asinine assumptions.

$10k from your own savings is no better than $10k of largess from the government. Paying for your food and lodging during retirement yourself from prior savings is no better than having the government provide them via enormous social programs. Actually, in both cases, the government-sponsored alternative is viewed as being superior, because the hazard of "excessive savings" (money not best put to work) can be avoided.

It is sick, and has been taught in most economics departments as the orthodoxy for decades. The most glaring deficiency in the analysis, to me, is that things like freedom, government tyranny, and other "externalities" are tossed overboard as nuisances. I'm much more fond of the Chicago school (where the end result of the analysis is at least compatible with liberty), and with the Austrian school (where liberty, tyranny, and other concepts are treated at the onset as more than inconvenient abstractions). Free markets went out of style with mainstream economists decades ago - we are the bitter clingers.

[NRG1973]

Global Rate cut will be welcomed. Should have a solid rise today.

But what about tomorrow? And the next day? And the day after that? Thats the problem with these rate cuts...they don't seem to have a lasting affect.

[palmer]

Past interest rate cuts have only mollified the market for a few days at the most. I wonder how long this rate cut will mollify the markets?

The real problem is all they will prove with this is that they are impotent. That will cause much bigger declines than if they had left rates alone.

[quack]

I guess it gives the short sellers(back in play today) a bit of a boost.They can short stocks again,rate cut makes stock go higher,only to fall again,shorts make money on the downside.Great idea if your TRYING to kill what's left of the market.The stock market dropping so much is the only thing it had ,to fend off short sellers.

At least it'll give me a good chance to unload my crap.

[palmer]

Global Rate cut will be welcomed. Should have a solid rise today.

Sorry, the bank insolvency crisis (Europe melting down financially) will not be affected on iota by a rate cut. The credit bubble deleveraging is well beyond this measure now.

[ovrtaxt]

“we are all dead in the long run”, the immortal wods of Maynard Keynes. I didn’t know this until recently, but apparently he was a homosexual pedophile or some such. The psychology of a man liek that is interesting- no kids, no connection to the future- in fact, perhaps a subconscious aggression toward the future.

His ideas are an economic time bomb with a looooooong fuse. It’s getting short now though.

[palmer]

Negative interest rates? Has that ever happened? How would that work?

Inflation. But that won't happen. Bernanke said long ago he would manipulate longer terms rates down once short term got to zero. It's a mistake, especially now, but that's what he said he would do.

[palmer]

At least it'll give me a good chance to unload my crap.

yep.