Friday, August 17, 2007

Somehow I don't believe the Fed is going to solve the credit problem and thus the housing problem and thus the stock market problem (Well, maybe the stock market, who can understand their thinking?) with a wave of their interest rate wand.

Like in Stardust, the witch can turn a goat into an innkeeper, but he still eats the scenery. And every time she used her magic, she loses a bit more of her glamour spell.

There will be consequences down the road to making money easier to borrow. Isn't that how we got into this mess in the first place? Not saying they shouldn't have done it, just that it isn't the magic answer.
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5 comments:

Anonymous said...

The below is important, much of what we do here is education. Note that the FED had promised NOT TO BAIL the ass-holes that caused the 'sub-prime' problem, since Monday the richest people in Santa-Monica, CA have redeemed all their investments from Country-Wide-Investment-Bank, they should have lost their ass, it should have gone bankrupt, these folks counted on shafting the little GUY, but NO.
Now the USA has decided to cover the countrywide ass. The investors, and ALL the harm that has been done by CountyWide, should have punished those who thought they would profit. Now we have created a heads-win/tails-win. They could have made money, and with the slightest downward pressure they get their money back. Not like the millions of Americans that will lose their homes.
Why didn't the FED give the $10 Billion to a fund to put a holiday on foreclosures for five years?

This is BAD-news bear for the dollar, the world is NOT STUPID. THE USA public is STUPID, but the WORLD is NOT stupid, read the following very carefully.

FOREX-Dollar falls after Fed acts on credit turmoil

Fri Aug 17, 2007 7:12 PM BST144
By Kevin Plumberg

NEW YORK, Aug 17 (Reuters) - The dollar fell broadly on Friday after the Federal Reserve slashed the interest rate it charges on loans to banks and said U.S. economic growth could slow in light of tightening credit markets.

The dollar was pulling back from a seven-week high against a basket of major currencies on Thursday after investors sought the safety of the currency and of U.S. Treasuries during the week in the midst of a global stock rout.

The Fed's action, while alleviating some fears about U.S. lending conditions, dealt a blow to the greenback since many speculated the central bank could be on a path to lower its benchmark interest rate, thereby reducing the dollar's yield advantage.

"By no means is this positive to the dollar," said Gregory Salvaggio, a senior currency trader at Tempus Consulting in Washington. "Actually, this is the two-headed monster for the buck: lower interest rates and slower growth."

August 17, 2007 at 12:03:00 PM PDT
Anonymous said...

The dollar has been going into the toilet for twenty years.

I really think that when we people say stupid shit like "the dollar is UP", they need to look at the BIG picture, e.g. at the real world, and the real place of the USA in that world.

The USA is a third world plantation colony with Nukes. By way of Bretton-Woods and WWII the USA dollar become the FIAT currency by faith originally, and by gun most recently, the rest of the world is now SICK of the USA 'world-cop-police-state' SHIT, and thus MY FRENCH.

All the USA CEO's have been busy buying haciendas in France, Italy, Spain, and Portugal the past twenty years. In a generation white-folk will be a minority in America, and a very large fence will be put around the USA. The USA always was a plantation colony and always will be, thus the constant need to bring in low wage immigrants, the only thing new today, is the rich are planning to NOT live here, nor raise their children here. I'm talking the REAL RICH. Not the phone HELOC Bend-Rich.

August 17, 2007 at 12:13:00 PM PDT
Anonymous said...

We're going to have stagflation if the Fed follows the easy path. And it will be pressured to.
*
I agree whether we call it hypo-inflation, deflation, stagflation, ... the fact is we know a couple facts.

1.) That everyone is selling oil and gold, because nothing else will sell.

2.) That the FED is handing out billions because the guy who runs treasury used to run goldman-sachs, and all his boyfriends sit on the board at country-wide,et-al

3.) The rest of the world will vote USA with their FEET. The only chance the USA had to fix the problem was provide a real-rate of return to foreign investors. The FED has signaled that the DOLLAR must collapse.

Congress, the banking committee and all just a few months ago promised that the sub-prime fuck-heads wouldn't get bailed out, and by that they meant the investors. Since Monday the richest people in Beverley Hills got bailed out of their country-wide 'investment bank'.

It's too late now, the investing fuck-heads got their money back, and put it into T-Bills now they're all sitting pretty. Now, its time to watch the niggers, spic's, spuds, and white-trash, to lose their flipper bait ( Homes ) while the richest people in America wait to buy it all back for penny's on the dollar.

You all notice that NOT NO-WHERE in the press are you reading any of this shit in the USA press?? Its simply because those that own the press, are allowed to get their money out of the bank first. In a few days the masses will be told, and then we'll be told of a need of a bank-holiday.

August 17, 2007 at 12:30:00 PM PDT
Anonymous said...

Somehow I don't believe the Fed is going to solve the credit problem and thus the housing problem and thus the stock market problem (Well, maybe the stock market, who can understand their thinking?) with a wave of their interest rate wand. - duncan
*
I will in my humble opinion express a rhetorical answer to this premise of rescue by the FED.
First of all JUST LIKE BEND Oregon, the government cares most for the beautiful people ( The Owners ). On Monday Merrill Lynch put out a call to those who held paper in Country-Wide of an imminent bankruptcy, because they can no longer get cash from investors. The richest people in Beverly Hills rushed to the Country-Wide-Bank offices and demanded withdrawal. The FED stepped in Tuesday with cash to handle that withdrawal.

By lowering the interest rate today, the FED has bailed out the stock market.

Don't worry about what the FED thinks, only watch what they do.

The FED has now fixed the credit problem ( for the rich ), it has fixed the stock-market problem, the housing problem is going to take 5+ years to work out as 2006 homes will not default on their 5/1 ARMS until 2011.

The rich get richer, the poor get poorer. There is NOTHING new here.

Welcome to America.

August 17, 2007 at 12:42:00 PM PDT
Anonymous said...

Here is a good example why FED bailouts will not fix the problem.

A difference between crises of liquidity and crises of insolvency

n the 1990s, there were financial crises, but the flashpoints were in developing countries. This time the problem is in the US itself. Moreover, it is a problem that has been brewing for two decades. In the 1990s, the Federal Reserve, the US central bank, provided cheap money to get the economy going and helped create the biggest stock market boom in the country's history. When the bubble burst, it solved that problem by creating the US's biggest housing bubble to date. The bubble burst about a year ago, but the pain will last for a long time.

Liquidity crises are those in which firms and individuals have a cashflow problem; interest rate cuts help them through the tough times. Insolvency crises are much more serious; slashing rates makes no difference when people are going bust. The LTCM collapse was a liquidity crisis, and what's happening now is an insolvency crisis.

Hundreds of thousands of households are insolvent, mortgage lenders are going belly-up, construction firms are going out of business, hedge funds that traded complex securities backed by sub-prime loans are going bankrupt. Conclusion? This has the potential to be very serious indeed.

August 18, 2007 at 7:33:00 AM PDT

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