Broken Surge
DJI (US)
FTSE (UK)
Posted on 10/08/2008 8:34:04 AM PDT by TigerLikesRooster
FTSE fails to hold rate cut gains
By Michael Hunter
Published: October 8 2008 08:41 | Last updated: October 8 2008 16:11
London equities failed to hold gains inspired by a co-ordinated emergency interest rate cut of 50 basis points from the world’s leading central banks on Wednesday, with resource stocks exerting pressure on the index amid concern about the outlook for global economic growth.
The Bank of England, the US Federal Reserve and the European Central Bank as well as the central banks of Canada, Sweden and Switzerland reduced their key lending rates in a co-ordinated move to ease the global financial crisis.
“At last they all woke up,” said Riccardo Barbieri-Hermitte at Bank of America.
Charles Diebel at Nomura said: “It underlines how seriously they are taking the situation and this more than anything should help instill more confidence in the system and lessen some of the tensions in the money markets”.
But the move failed to restore confidence in the global financial system, and equity indices around the world continued to post heavy losses.
Toward the end of a turbulent session the FTSE 100 was 256 points lower at 4,416.4, a loss of 5.5 per cent, although it stayed off session lows of 4,245 before the rate cuts were announced. The FTSE 250, seen as more representative of the domestic UK economy, was 3.5 per cent weaker at 7,168.8.
Wall Street indices also failed to sustain attempts at an intraday rally. As European traders moved into the last 30 minutes of their business day, the Dow Jones Indistrial Average was 123 points lower at 9,324.1
(Excerpt) Read more at ft.com ...
Ping!
It seems the market does better when governments and bankers step aside.
Because it isn’t working.
The TED broke 400 this morning. The credit situation is NOT improving, it is getting worse.
For all the blovation I see from “conservatives” here on FR railing against “socialism” — that is exactly what is needed just now. The government needs to seize banks, throw the management out of unopened upper story windows, and then go through the balance sheets (and what isn’t on the balance sheets) and get the situation cleaned up NOW. Not this “let’s give them an option to sell us the crap paper.” No, the government needs to inject liquidity in sufficient quantity that the Treasury gets a seat on the board of directors, and gets senior preferred stock with punitive yields, as well as warrants or options to purchase the common when share prices go back up.
THE central problem here is that NO ONE trusts any other bank. That’s what a TED of 400+ tells us and the high LIBORs are telling us.
The European nations are having to seize banks in order to clean up the mess. In a short time, those banks will be more trusted than US banks, and capital will flow there first, leaving us with as big a mess as we have now.
This has become a global race to see who can get their banks cleaned up and trustworthy enough to attract deposits. We’re not winning. We’re not as bad as, say, Iceland, but we’re not winning yet. We’re merely losing less quickly than the Euro zone.
The Dow is down 190 points right now (11:47 AM EDT). Investors are crapping all over Bernanke’s rate cut. Dontcha’ love that government intervention?
There is a precondition for this: Fire Hank Paulson. Keep any other Wall St. hack to run the Treasury show.
Even if someone puts a BIG band-aid on cancer, it’s still a band-aid. And it’s still cancer.
Keep any other Wall St. hack to run from running the Treasury show.
450 page democrat altered intervention plan fails 2008.
Hold on to your pennies, FRiend.
I knew there was a catch to those 14% Icelandic CD’s EverBank was peddling a few months ago.
Hold on to your pennies, FRiend.
Viagra don’t work on a corpse.
Then it is time to conjure up some Voodoo spell. May not work but is worth a try.
Maybe the entire Congress will do a naked dance in war paint and pink feathers on Oct. 13 in the reflecting pool in front of the Washington Monument. (next full moon)
If you have a rally lasting four or more hours, see a doctor.
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