Why a Rate Cut Might Hurt You

THE WALL STREET JOURNAL ^ | Wednesday, June 25, 2003 | RUTH SIMON and ZACHERY KOUWE

[presidio9]

The Fed is expected to cut short-term interest rates Wednesday to boost the economy. But it may not help you.

Experts expect the Federal Reserve Board to cut the federal-funds rate, currently 1.25%, by either a quarter-point or more. The move would be the 13th time the Fed has cut rates since the beginning of 2001.

[PeterPrinciple]

Who benefits most from an interest rate cut? could it possibly be the federal government and state governments?

[Grampa Dave]

These two clowns posing as financial reporters were probably hired by Al Hunt and are card carrying Rats.

If they were worth a tinkers damn, they would have posted this link:

http://home.ingdirect.com/open/open.html

ING offers 2% FDIC, and it takes about 5 minutes to set up your ING account with no minimum. You can seamlessly transfer to and from your bank's checking account on line.

This is the type BS article that Al Hunt's left wing lunatics who write for the WSJ. This is why Miss Marple, I and many of us no longer subscribe to the WSJ.

[presidio9]

Agreed. And this article misses the most important point: The best way to spur the economy is clearly by raising the minimum wage.

[stimpyone]

Who benefits most from an interest rate cut? could it possibly be the federal government and state governments As stated in the article, it helps those who have short term debt, e.g. credit cards/car loans and such but hurts those who have large amounts of cash. It should help provide a decent boost to the stock market.

[Auntie Mame]

Grampa, tell me more about this "Ing" place. How much experience have you had with them? Do you know how long they've been in business? What is their physical address? How did you find out about them?

.... and, of course, anything else you know about them would be most appreciated.

I've always been a little leary of cyberbanks but would really like to get over it.

[Grampa Dave]

They are an old English company.

What they do is give 2% interest on their accounts and make mortgage loans with the proceeds at 4 to 5 %.

They are FDIC insured and no money market is insured. There is no long tie up of your money and minimums as with CDs.

Our son and DIL went to ING and love it. It is seamless. They will be buying a new home next month, and they will do their own impounding re property taxes and insurance with their ING account. A nephew has done the same thing.

I have sent this data to our church's treasurer to convert the cd's when they expire and current passbook savings.

[CJ Wolf]

Another good way would be to sell gas at 25 cents per gallon.

[DanDan]

They are an old English company.

As a matter of fact, ING is a Dutch bank, the N stands for Nederlanden. It was created in 1990 as a merger between Nationale-Nederlanden (already a merger of 1850's banks) and NMB Postbank Groep.

It is a very large and serious company, in banking, asset management and even insurance, with offices in 60 countries. ING Direct is the internet branch.

[presidio9]

How are we going to do that without inconveniencing the porcupine caribou?

[Grampa Dave]

Thanks for the correction.

ING is very serious about banking and acquiring new customers.

I had never heard about ING until we were in the UK a few years ago. They had ads all over with their lion. We thought that they were Brit.

Thanks again for the correction.

[Auntie Mame]

Thanks Grampa and Dan. I appreciate the info and recommendation.

[PeterPrinciple]

it helps those who have short term debt,

And who owns the most short term debt?

I am not being critical but the article did not address this point.

It is my understanding that the Clinton admin moved a lot of govt debt to lower interest short term financing. This worked but short term debt is more chaotic and has inherent risk. As long as your luck holds out it is great, but I can remember the time we had 20% interest rates also and because people were not locked in on intererest rates, they and their businesses went down.

I ask people when things go right or wrong, was it luck on management. Clinton got lucky, but how long with the luck hold out.

[CJ Wolf]

how about we flood the market with cheap iraqi oil.

but nooooo....."At the federal level, Rep. Don Young (R-Alaska), chairman of the House Transportation and Infrastructure Committee, is spearheading a drive to nearly double the federal gas tax. He wants to phase in a series of annual increases that would raise the feds' take from the current 18.4 cents per gallon to more than 33 cents by 2009."