Shocked by fed decision

Ben should be looking for a safe spot to make a "soft" landing in his plane with a sputtering engine. Instead he has elected to pull back as hard as possible on the yoke to try and gain altitude. Stall speed is approaching.......

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Well said. Lets see if the next quarter is the stall spot.
 
Quote from dtan1e:

the pain is not going to go away, its either take it in one shot or as a numbing kind of pain that drags and drags, what easing rate so there be more credit, sort of like saying the sub-primers r up to their eyeballs in debt & suggest they go get another credit card to help pay of the more urgent payments first, is that what you propose ?
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It will drag and drag until the transition is over. If there is enough "oomph" to compensate for the drag, then the economy doesn't stall.

No, I'm not saying that they should take on more debt, but give them an opportunity to replace the debt. If people are up to their eyeballs in debt, and that debt will drag them down to financial ruin, then I think its better for them to refinance that debt to a lower interest rate so that they can fix things. Some people never learn their lesson, but it would help those that do.

If I was holding an ARM loan for a homebuyer who couldn't make the payments after their ARM reset, I would offer them a fixed rate, long term loan, after an audit of their finances. I'd do a cost risk analysis of reposessing the property, vs. a loss in interest payments. Of course, I would pre-screen some of the applicants...like they would have to meet certain debt to income ratios...not everyone, or even the majority, could be saved.

SM
 
Quote from EMRGLOBAL:

Ben should be looking for a safe spot to make a "soft" landing in his plane with a sputtering engine. Instead he has elected to pull back as hard as possible on the yoke to try and gain altitude. Stall speed is approaching.......

_________________________________________

Well said. Lets see if the next quarter is the stall spot.
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Stall q1-q2 2008 - enough time for real effects to hit AFTER the elections. That's my best guess anyway, although in these times who can really say?
 
Quote from Cheese:

[BIts about the US banking system and both the stress caused and threat posed to the banking system by failure in the subprime market. Most of the guys at the Fed table are BANKERS. Yes they are considering the needs of the national economy but what they care about is their banking system. And that is what they are putting first and trying to protect when they cut the rate by a full half per cent.
:) [/B]
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If you are like me and have been reading all of the discussions on ET and news releases...you are confused about this much of a rate cut @ this time? I have been reading an older book by Harry Schultz "Panics & Crashes and How You Can Make Money Out Of Them". The book is mostly about the causes of P&C going back to Roman Times. It shows by examples that the easy money policy of governments is what causes them.

The book got me to thinking that Bernanke & the other Fed Reserve folks are always traveling around the world making speeches, but more importantly talking with other central bankers. Since we are all aware that subprime (easy money) problem is not localized to the US, then we must believe that other central bankers are seeing how big the problem is for them.

US banks only have a small percentage of funds on hand vs deposits and if a widespread run on US banks like the one on Northern Rock happens, that could shake the entire US banking system and Bernanke will protect that at all costs! Therefor I think he will cut rates again @ the next fed meeting to protect the banking system.
 
Quote from da-net:

Therefor I think he will cut rates again @ the next fed meeting to protect the banking system.
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.. and the printing presses will be turned up even more..

Coming up within the next 12-18 months will be the most opportunistic time in the history of our country to acquire wealth.

just remember this.. when you start hearing servers talk about opening up IB accounts to short the dollar, you need to find another edge.
 
Quote from dhpar:

and you continue to post this bullshit. we could not get a better prove than the recent market moves showing that fed fund futures market DOES NOT reflect market expectations about target rate...which many idiots (together with you) here suggested.
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Quote from dhpar:

you know why! you were already told to stop poluting thread with this crap on a different thread e.g.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=103613

stop advertising your blog in every post.
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Yes! I 2nd that. Stop polluting ET with your blog pimping. You're a piker!!
 
...simply fulfilling their function as Lender of Last Resort.
It's in the name: Federal Reserve.
If that graph looked any different, they wouldn't be doing what they're paid to do.
For an example of what happens when that function isn't performed competently by a central banker with a clue as to why he gets paid, look over at the UK and Northern Rock.
 
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