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Post by jeffolie on Sept 18, 2007 14:36:10 GMT -6
The stock market closed up over 330 points and the dollar index hit new lows at 79.11.
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Post by unlawflcombatnt on Sept 18, 2007 16:04:46 GMT -6
Yeah, nothing like letting the "free market" run its course, is there. Every speculative and bubble-related share price skyrocketed. Everything shot straight up just after 2PM Eastern Time, coinciding exactly with the Fed's announcement of a 0.5% target rate cut. DJI-Homebuilders stocks increased +6% today. S & P Homebuilders increased +5.1% in 1 day. ______________________________ Investment Banks Increased +5.1% today Lehman Brothers increased a whopping +10.1% today alone. Charles Schwab Increased +6.6% today Goldman Sachs increased +6.87% in 1 day. Morgan Stanley increased +5.5% in 1 day. This is not a "free market" being allowed to run its course. It's "government intervention", and on a MASSIVE scale. This was a MASSIVE investor giveaway, and a MASSIVE speculator bail-out. The Fed's move had nothing to do with its perception of the health of the "real" economy, and everything to do with the economic health of investors & speculators. Once again, excessive risk takers can always count on the Fed and the government to bail them out. Speculators & risk-takers have little to lose, and much to gain. The Fed will continue to encourage excessive risk-taking and bubble formation, since a bail-out is 100% guaranteed. It's so reassuring to know the Fed and the government will always protect the economic interests of the rich, and never those of the non-rich. We all have "equal" protection. It's just that some have "more equal" protection than others. And how much more equal protection is determined by how much more money you have. All of us are equal--as long as we have an equal amount of money. This just makes me so proud to be an American-- with a government "of the rich, by the rich, and for the rich."
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Post by jeffolie on Sept 19, 2007 11:42:10 GMT -6
I continue to focus on the effects of devaluing the dollar as one result of the .50% rate cut to the discount rate and fed funds rate.
This is more fuel to the fire of inflation.
Particularly, the cost of imports rising will ripple throughout the economy. This impacts those who can afford it least.
So the average American and fixed income get hurt the most which the rich get richer.
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Post by unlawflcombatnt on Sept 19, 2007 21:28:39 GMT -6
I continue to focus on the effects of devaluing the dollar as one result of the .50% rate cut to the discount rate and fed funds rate. This is more fuel to the fire of inflation.... Particularly, the cost of imports rising will ripple throughout the economy. This impacts those who can afford it least. So the average American and fixed income get hurt the most which the rich get richer. I agree. Inflation hurts those on fixed income the most. The deliberate understatement of inflation hurts them even more. Rising import prices will have mixed effects. Again, rising import prices will hurt those on fixed income. In the longer run, however, it should help American workers. It should increase the relative price of foreign production compared to American production. It should make it relatively more profitable to pay American workers to produce goods, rather than pay workers foreign workers to produce goods. It'll have less effect on outsourcing to China, since their labor costs are so much lower. But it should make a significant difference in the nearly 1/2 of our trade deficit attributed to Europe, Japan, and Canada. Workers in those countries are paid as well as American workers, or at least almost as well. A rise in import prices may tip the balance in favor of using American workers, since American workers will be relatively cheaper. Only time will tell how this all works out in regards to the trade balance. And only time will tell how many more times the Fed will cut the target interest rate, and make inflation that much worse.
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