This is straight from George Ure at peoplenomics
Update: Fed Goes 50 + 50 - But, Is it Good?
The
Federal Reserve in a bit of a surprise today tacitly admitted that the
economy was going softer, faster, than they had expected and so they
have lowers the Fed Funds rate 50-basis points (1/2%) and matched that
with a discount rate move of 50 BP's - or 1/2%. Here's the statement:
Federal Reserve in a bit of a surprise today tacitly admitted that the
economy was going softer, faster, than they had expected and so they
have lowers the Fed Funds rate 50-basis points (1/2%) and matched that
with a discount rate move of 50 BP's - or 1/2%. Here's the statement:
For immediate releaseThe
Federal Open Market Committee decided today to lower its target for the
federal funds rate 50 basis points to 4-3/4 percent.Economic
growth was moderate during the first half of the year, but the
tightening of credit conditions has the potential to intensify the
housing correction and to restrain economic growth more generally.
Today’s action is intended to help forestall some of the adverse
effects on the broader economy that might otherwise arise from the
disruptions in financial markets and to promote moderate growth over
time.Readings
on core inflation have improved modestly this year. However, the
Committee judges that some inflation risks remain, and it will continue
to monitor inflation developments carefully.Developments
in financial markets since the Committee’s last regular meeting have
increased the uncertainty surrounding the economic outlook. The
Committee will continue to assess the effects of these and other
developments on economic prospects and will act as needed to foster
price stability and sustainable economic growth.Voting
for the FOMC monetary policy action were: Ben S. Bernanke, Chairman;
Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig;
Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William
Poole; Eric Rosengren; and Kevin M. Warsh.In
a related action, the Board of Governors unanimously approved a
50-basis-point decrease in the discount rate to 5-1/4 percent. In
taking this action, the Board approved the requests submitted by the
Boards of Directors of the Federal Reserve Banks of Boston, New York,
Cleveland, St. Louis, Minneapolis, Kansas City, and San Francisco.
While the stocks have bounded upwards on the news, it is clearly not an instant solution to the world's economic problems. The British today were forced to guarantee the deposits of all depositors as the headlines today have gone to the note
that "British bank under siege as savers bale out."
that "British bank under siege as savers bale out."
While
we might see a short-term pop in the stocks today, there's a terrible
message to foreign banks holding US paper assets - they're not going to
pay as much. Now, what follows is that if they don't pay as much, they
are not worth as much, although that chicken won't likely be coming home to roost until today.
we might see a short-term pop in the stocks today, there's a terrible
message to foreign banks holding US paper assets - they're not going to
pay as much. Now, what follows is that if they don't pay as much, they
are not worth as much, although that chicken won't likely be coming home to roost until today.
For
the balance of today, we might see a temporary love-fest, but the Fed
continues to worry about inflation and around here, we're wondering how
soon someone wakes up to the idea that by making investing in US debt
instruments less appealing, what we are really doing is forcing a
devaluation of the dollar in terms of international goods and services.
the balance of today, we might see a temporary love-fest, but the Fed
continues to worry about inflation and around here, we're wondering how
soon someone wakes up to the idea that by making investing in US debt
instruments less appealing, what we are really doing is forcing a
devaluation of the dollar in terms of international goods and services.
So,
yes, the Fed can cut, but that kills the Dollar overseas (which means
import prices will now rise and that will come along as inflation) or,
we could have held rates, preserved the value (purchasing power of the
dollar). To me, this is as close to assuring an increase in grains
(which I hold) previous metals (which I hold) and all non-paper assets.
yes, the Fed can cut, but that kills the Dollar overseas (which means
import prices will now rise and that will come along as inflation) or,
we could have held rates, preserved the value (purchasing power of the
dollar). To me, this is as close to assuring an increase in grains
(which I hold) previous metals (which I hold) and all non-paper assets.
It's not like I'm the only guy holding this view - go check out what Dr. Marc Faber told Bloomberg before the cut...
Update: Fed Goes 50 + 50 - But, Is it Good?
The
Federal Reserve in a bit of a surprise today tacitly admitted that the
economy was going softer, faster, than they had expected and so they
have lowers the Fed Funds rate 50-basis points (1/2%) and matched that
with a discount rate move of 50 BP's - or 1/2%. Here's the statement:
Federal Reserve in a bit of a surprise today tacitly admitted that the
economy was going softer, faster, than they had expected and so they
have lowers the Fed Funds rate 50-basis points (1/2%) and matched that
with a discount rate move of 50 BP's - or 1/2%. Here's the statement:
For immediate releaseThe
Federal Open Market Committee decided today to lower its target for the
federal funds rate 50 basis points to 4-3/4 percent.Economic
growth was moderate during the first half of the year, but the
tightening of credit conditions has the potential to intensify the
housing correction and to restrain economic growth more generally.
Today’s action is intended to help forestall some of the adverse
effects on the broader economy that might otherwise arise from the
disruptions in financial markets and to promote moderate growth over
time.Readings
on core inflation have improved modestly this year. However, the
Committee judges that some inflation risks remain, and it will continue
to monitor inflation developments carefully.Developments
in financial markets since the Committee’s last regular meeting have
increased the uncertainty surrounding the economic outlook. The
Committee will continue to assess the effects of these and other
developments on economic prospects and will act as needed to foster
price stability and sustainable economic growth.Voting
for the FOMC monetary policy action were: Ben S. Bernanke, Chairman;
Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig;
Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William
Poole; Eric Rosengren; and Kevin M. Warsh.In
a related action, the Board of Governors unanimously approved a
50-basis-point decrease in the discount rate to 5-1/4 percent. In
taking this action, the Board approved the requests submitted by the
Boards of Directors of the Federal Reserve Banks of Boston, New York,
Cleveland, St. Louis, Minneapolis, Kansas City, and San Francisco.
While the stocks have bounded upwards on the news, it is clearly not an instant solution to the world's economic problems. The British today were forced to guarantee the deposits of all depositors as the headlines today have gone to the note
that "British bank under siege as savers bale out."
that "British bank under siege as savers bale out."
While
we might see a short-term pop in the stocks today, there's a terrible
message to foreign banks holding US paper assets - they're not going to
pay as much. Now, what follows is that if they don't pay as much, they
are not worth as much, although that chicken won't likely be coming home to roost until today.
we might see a short-term pop in the stocks today, there's a terrible
message to foreign banks holding US paper assets - they're not going to
pay as much. Now, what follows is that if they don't pay as much, they
are not worth as much, although that chicken won't likely be coming home to roost until today.
For
the balance of today, we might see a temporary love-fest, but the Fed
continues to worry about inflation and around here, we're wondering how
soon someone wakes up to the idea that by making investing in US debt
instruments less appealing, what we are really doing is forcing a
devaluation of the dollar in terms of international goods and services.
the balance of today, we might see a temporary love-fest, but the Fed
continues to worry about inflation and around here, we're wondering how
soon someone wakes up to the idea that by making investing in US debt
instruments less appealing, what we are really doing is forcing a
devaluation of the dollar in terms of international goods and services.
So,
yes, the Fed can cut, but that kills the Dollar overseas (which means
import prices will now rise and that will come along as inflation) or,
we could have held rates, preserved the value (purchasing power of the
dollar). To me, this is as close to assuring an increase in grains
(which I hold) previous metals (which I hold) and all non-paper assets.
yes, the Fed can cut, but that kills the Dollar overseas (which means
import prices will now rise and that will come along as inflation) or,
we could have held rates, preserved the value (purchasing power of the
dollar). To me, this is as close to assuring an increase in grains
(which I hold) previous metals (which I hold) and all non-paper assets.
It's not like I'm the only guy holding this view - go check out what Dr. Marc Faber told Bloomberg before the cut...
and you might want to check this out too if you've been following my logic, cuz eyes on Goldman Sachs seems very wise to ME.
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