Post by unlawflcombatnt on Dec 11, 2007 18:09:47 GMT -6
Fed Lowers Rates, Wall Street Tumbles
By JEANNINE AVERSA
December 11, 2007
"The Federal Reserve dropped its most important interest rate to a nearly two-year low on Tuesday and left the door open to additional cuts to prevent a housing and credit meltdown from pushing the economy into a recession.
Fed Chairman Ben Bernanke, and all but 1 of his colleagues agreed to trim the federal funds rate by 1/4% point to 4.25%.
The rate reduction, the 3rd this year, was needed to energize national economic growth, Fed officials said. The deepening housing slump is affecting the behavior of consumers and businesses alike....
"Economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks," the Fed said....The 3 rate cuts ordered thus far "should help promote moderate growth over time,"
On Wall Street, stocks tumbled, reflecting disappointment among some investors who were hoping for a larger rate cut. The Dow Jones industrial plunged more than 200 points."
Actually, it dropped almost 300 points (-294 to be exact, or over -2%)
"The funds rate affects many other interest rates charged to individuals and businesses and is the Fed's most potent tool for influencing economic activity....
The fact that the Fed's key rate was lowered again marked an about-face for the central bank. At its previous meeting in October, Fed officials hinted that their 2 rate cuts probably would be sufficient to help the economy survive the housing and credit stresses. Since then, however, financial conditions have deteriorated, prompting Bernanke to signal before Tuesday's meeting that another rate cut may be needed after all as an insurance policy against undue economic weakness....
the Fed...also lowered its lending rates to banks by one-quarter percentage point. That was the 4th cut to the discount rate since mid-August....
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.
Harder-to-get credit has thwarted would-be home buyers, intensifying the housing collapse. Foreclosures have soared to record highs. The number of unsold homes have piled up. Problems are expected to persist well into next year.
The 9-1 decision for a 1/4 point reduction to the funds rate was opposed by Eric Rosengren, president of the Federal Reserve Bank of Boston. He preferred a bolder, 1/2 point cut.
"Fed's language clearly reflects a heightened degree of concern about the economic outlook," said Carl Tannenbaum, chief economist at LaSalle Bank....
The situation poses the biggest challenge yet to Bernanke, who took over the Fed in February 2006. Some analysts have questioned whether he waited too long to cut the Fed's key rate and whether he has acted aggressively enough to the nation's economic woes.
In September, the central bank dropped the funds rate for the first time in 4 years. Then it was a 1/2-point drop; on Oct. 31 came a 1/4-point cut.
The rationale behind the lower rates is that they will induce consumers and businesses to boost spending, invigorating economic activity. With Tuesday's reductions, both the funds rate and the prime rate are now at their lowest levels in nearly 2 years....
the economy....is expected to slow to a pace of just 1.5% or less over the final 3 months of the year as the housing collapse and credit crunch chill consumers, sapping overall economic growth. The odds of a recession have grown....
the unemployment rate...is expected to rise....to 5% by early next year....
Yeah. But the Unemployment rate rise depends on how many Unemployed workers are dishonestly reclassified as "Not-In-Labor-Force," thus removing them from the number officially counted as unemployed. (The true Unemployment rate is over 6% at present, if government manipulation was stripped from the calculation.)
There are no statistics the Bush junta won't manipulate, if it helps Corporate America and Financial Industry loan sharks--and delays the transition of our "faith-based" economy into a "fate-based" Economic Armageddon. If nothing else, statistical manipulation can prolong the bubble--long enough to let the most affluent get their money out, and ensure that the less affluent absorb the losses.
But the Bush junta can't settle for just "capitalizing" gains, and "socializing" losses. They want more. So they "fabricate" even more gains, which further increases "capitalization" of gains, and further increases "socialization" of losses.
We now have the best government money can buy. Even more accurately,
we have the best government big money can buy.
The Bush junta's only mission is to help Corporate America parasitize the American people, and extract as much wealth from them as possible. Unlike successful parasites, however, they're killing their host. Their greed has replaced common sense, ethics, and patriotism. And if these Corporate parasites don't wise up soon, they'll kill their host. And when parasites kill their host, they kill themselves as well.
By JEANNINE AVERSA
December 11, 2007
"The Federal Reserve dropped its most important interest rate to a nearly two-year low on Tuesday and left the door open to additional cuts to prevent a housing and credit meltdown from pushing the economy into a recession.
Fed Chairman Ben Bernanke, and all but 1 of his colleagues agreed to trim the federal funds rate by 1/4% point to 4.25%.
The rate reduction, the 3rd this year, was needed to energize national economic growth, Fed officials said. The deepening housing slump is affecting the behavior of consumers and businesses alike....
"Economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks," the Fed said....The 3 rate cuts ordered thus far "should help promote moderate growth over time,"
On Wall Street, stocks tumbled, reflecting disappointment among some investors who were hoping for a larger rate cut. The Dow Jones industrial plunged more than 200 points."
Actually, it dropped almost 300 points (-294 to be exact, or over -2%)
"The funds rate affects many other interest rates charged to individuals and businesses and is the Fed's most potent tool for influencing economic activity....
The fact that the Fed's key rate was lowered again marked an about-face for the central bank. At its previous meeting in October, Fed officials hinted that their 2 rate cuts probably would be sufficient to help the economy survive the housing and credit stresses. Since then, however, financial conditions have deteriorated, prompting Bernanke to signal before Tuesday's meeting that another rate cut may be needed after all as an insurance policy against undue economic weakness....
the Fed...also lowered its lending rates to banks by one-quarter percentage point. That was the 4th cut to the discount rate since mid-August....
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.
Harder-to-get credit has thwarted would-be home buyers, intensifying the housing collapse. Foreclosures have soared to record highs. The number of unsold homes have piled up. Problems are expected to persist well into next year.
The 9-1 decision for a 1/4 point reduction to the funds rate was opposed by Eric Rosengren, president of the Federal Reserve Bank of Boston. He preferred a bolder, 1/2 point cut.
"Fed's language clearly reflects a heightened degree of concern about the economic outlook," said Carl Tannenbaum, chief economist at LaSalle Bank....
The situation poses the biggest challenge yet to Bernanke, who took over the Fed in February 2006. Some analysts have questioned whether he waited too long to cut the Fed's key rate and whether he has acted aggressively enough to the nation's economic woes.
In September, the central bank dropped the funds rate for the first time in 4 years. Then it was a 1/2-point drop; on Oct. 31 came a 1/4-point cut.
The rationale behind the lower rates is that they will induce consumers and businesses to boost spending, invigorating economic activity. With Tuesday's reductions, both the funds rate and the prime rate are now at their lowest levels in nearly 2 years....
the economy....is expected to slow to a pace of just 1.5% or less over the final 3 months of the year as the housing collapse and credit crunch chill consumers, sapping overall economic growth. The odds of a recession have grown....
the unemployment rate...is expected to rise....to 5% by early next year....
Yeah. But the Unemployment rate rise depends on how many Unemployed workers are dishonestly reclassified as "Not-In-Labor-Force," thus removing them from the number officially counted as unemployed. (The true Unemployment rate is over 6% at present, if government manipulation was stripped from the calculation.)
There are no statistics the Bush junta won't manipulate, if it helps Corporate America and Financial Industry loan sharks--and delays the transition of our "faith-based" economy into a "fate-based" Economic Armageddon. If nothing else, statistical manipulation can prolong the bubble--long enough to let the most affluent get their money out, and ensure that the less affluent absorb the losses.
But the Bush junta can't settle for just "capitalizing" gains, and "socializing" losses. They want more. So they "fabricate" even more gains, which further increases "capitalization" of gains, and further increases "socialization" of losses.
We now have the best government money can buy. Even more accurately,
we have the best government big money can buy.
The Bush junta's only mission is to help Corporate America parasitize the American people, and extract as much wealth from them as possible. Unlike successful parasites, however, they're killing their host. Their greed has replaced common sense, ethics, and patriotism. And if these Corporate parasites don't wise up soon, they'll kill their host. And when parasites kill their host, they kill themselves as well.