# Emergency Rate Cut - 0.75%



## vishalt (23 January 2008)

Jan. 22 (Bloomberg) -- The Federal Reserve lowered interest rates in an emergency move for the first time since 2001 after tumbling global stock markets and a jump in the U.S. unemployment threatened to push the economy into recession.

The central bank lowered the benchmark overnight lending rate to 3.5 percent from 4.25 percent, the Federal Open Market Committee said in a statement in Washington. Policy makers weren't scheduled to gather on rates until Jan. 29-30.
*
Dow futures paring loss, SPI200 pointing up 3%.

I told you guys this could be something that would make or break today!
*


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## overule (23 January 2008)

*Re: EMERGENCY RATE CUT*

Yeah.. tomorrow going to be good 

Have a feeling, we might just have the rally as in August.


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## MR. (23 January 2008)

*Re: EMERGENCY RATE CUT*

That explains why red just turned green. Thanks.


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## sideshowbob (23 January 2008)

*Re: EMERGENCY RATE CUT*

Thats not a great sign....

It just means that there really is a recession coming.

It might be the saving grace for those who wished to get out on Monday...
but we are moving down down down..

It was a boost in the Dow future forecast... but as Im watching the news live right now... its already dipping back to its initial cloudy forecast.

If this rate cut doesnt ease the markets tonight... we are headed for some mess,


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## Smurf1976 (23 January 2008)

*Re: EMERGENCY RATE CUT*

Looks like the great inflation is getting underway...


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## Santob (23 January 2008)

*Re: EMERGENCY RATE CUT*



Smurf1976 said:


> Looks like the great inflation is getting underway...




So I should invest in a wheelbarrow manufacturer?


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## MS+Tradesim (23 January 2008)

*Re: EMERGENCY RATE CUT*

Lol Smurf...."Debt worries? No worries! Get creditor countries off your back. Rid yourself of pesky national debt by inflating it out of existence. Make it worth nothing so they won't want to be repaid! Apply now at Helicopter Ben's Friendly Printing Press."


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## korrupt_1 (23 January 2008)

*Re: EMERGENCY RATE CUT*

crazyness!!! DOW jumps 350pts then gives back 200pt in minutes on the rate cut news....

so what does all this really mean? do we have a rally tomorrow or not?


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## Buffettology (23 January 2008)

*Re: EMERGENCY RATE CUT*

Damn, a cut of 0.75%, pretty large!


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## Buffettology (23 January 2008)

*Re: EMERGENCY RATE CUT*



MS+Tradesim said:


> Lol Smurf...."Debt worries? No worries! Get creditor countries off your back. Rid yourself of pesky national debt by inflating it out of existence. Make it worth nothing so they won't want to be repaid! Apply now at Helicopter Ben's Friendly Printing Press."




ha ha, stagflation here we come!


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## explod (23 January 2008)

*Re: EMERGENCY RATE CUT*



Buffettology said:


> ha ha, stagflation here we come!




Yeh, lets ask all de flations along, or is that flatulations, no worries mong us brudders.

But watch out, Big Chief Burnin Bush could be on the way soon, now that really lite up dis party.


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## MR. (23 January 2008)

Europe almost all back now to red. Maybe Its just that I'm tired.

http://finance.yahoo.com/intlindices?e=europe


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## brendan87 (23 January 2008)

Bank of Canada also cuts rate at scheduled meeting by 0.25%. 

"Financial market conditions have deteriorated since October, leading to a tightening of credit conditions in industrial countries. Given this, and a deeper, more prolonged decline in the U.S. residential housing sector, the 2008 outlook for the U.S. economy"


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## ShareIt (23 January 2008)

This could be a bad move.... it now confirms that the US economy is sinking!


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## Buffettology (23 January 2008)

*Re: EMERGENCY RATE CUT*



sideshowbob said:


> Thats not a great sign....
> 
> It just means that there really is a recession coming.
> 
> ...




Agree with this, I am hoping it will be my saving grace over the next wk or so, cut some losses and get back to mainly cash like I was just months ago!  

Then wait for some GREAT prices to come up, instead of just the OK ones I picked up only a few weeks ago!


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## explod (23 January 2008)

ShareIt said:


> This could be a bad move.... it now confirms that the US economy is sinking!




Yes they have just slashed the hull all the way and obviously forgot that they sold the life boats back in 2001.


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## dhukka (23 January 2008)

US market is not impressed, S&P500 down *4%*.


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## barnz2k (23 January 2008)

open of -4% not happy at all!


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## overule (23 January 2008)

Guys, grab more put options or start shorting


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## ShareIt (23 January 2008)

overule said:


> Guys, grab more put options or start shorting




Agree!


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## korrupt_1 (23 January 2008)

DOW responding positively since opening bell... rate cut taking effect? PPT doing their thing?

who's going to be shorting into these rallies?


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## overule (23 January 2008)

Dow  dropped more than 400 points. Are you sure ?


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## Buffettology (23 January 2008)

overule said:


> Dow  dropped more than 400 points. Are you sure ?




Opened about -400, dropped to about -450, then rallied to about -250 (somewhere around that), last I looked, was back to about -300.

Apparently on the floor at Wall Street there is mixed sentiment!  Nobody can make sense of it all.  No "chorus" so to speak.

Biggest one-off rate cut in 24 years!  Bush announced the tax relief package and fiscal stimulus might be larger than the $130-140 billion or whatever it was.  

I dont know what to make of it all!

But most expected a fall of AT LEAST 400 points, probably around 600 after the Martin Luther King holiday seeing Asia get smashed!  So I guess if it closes down 300, it aint too bad!  

The interesting part will the the day after!  Once people have had time to really think about it and take their positions.  Its gonna move one way or the other then!


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## Gundini (23 January 2008)

Thanks for sharing that with us Buffet, some good inside there...

Give us an update on the feelings where the DOW will finish? 

Striking move to say the least from the FED???


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## Buffettology (23 January 2008)

Gundini said:


> Thanks for sharing that with us Buffet, some good inside there...
> 
> Give us an update on the feelings where the DOW will finish?
> 
> Striking move to say the least from the FED???




Yeh, absolutely striking!  Obviously trying to make a statement, but really leaving them powerless at their scheduled meeting in a few days.  If they drop rates again, it will show just how bad they see the underlying data.  Afterall, they know a LOT more than us and a LOT earlier and this will probably just cause a further sell off!  

The feelings on where the DOW will finish from what I hear are also completely mixed.  They say there are as many opinions as there are brokers!  Everyone has one and their all different!  

I personally, wouldnt be surprised to see it close around -300 (but hey, what do I know that anyone else does not?).  What does that mean for us?  Considering they missed the global action, we could well close relatively flat.  

All simply my own speculation though, take it with a grain of salt!


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## Gundini (23 January 2008)

As far as I can see, the market can't work it out, like they are shocked really... But the fact that the cut hasn't done anything but wake everybody up to the fact that the FED has lost control.

God Bless America!


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## explod (23 January 2008)

Gundini said:


> As far as I can see, the market can't work it out, like they are shocked really... But the fact that the cut hasn't done anything but wake everybody up to the fact that the FED has lost control.
> 
> God Bless America!




Do you mean that the Sheeple are finally seeing a little bit of the bigger picture?

Now if the spending stops and thoughts go to saving a bit, that could spell real trouble.

PPT must have gone to Ben's brekky too.


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## Buffettology (23 January 2008)

Gundini said:


> As far as I can see, the market can't work it out, like they are shocked really... But the fact that the cut hasn't done anything but wake everybody up to the fact that the FED has lost control.
> 
> God Bless America!




Yeh, give it a day to pan out and people to collect their thoughts and decide their positions.  At the moment, its a mixed bag, one group fighting against the other. 

Looking at the structure and fundamentals of the global economy though, its really only the US in such an economic crisis!  Surely with China and India booming, this cant have too long or too big of an effect on Australia!  We need to reach a bottom and then let things pan out and clear up!

Not to mention, will this banking crisis and housing fall have an impact on retail and the rest of the US economy?  Of course it will to some extent, but just how big?  I hope economists make it 16 recessions from the past 5!


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## Gundini (23 January 2008)

It's a bit like flashing a red flag to a bull....

The Fed have used drastic measures in a meager attempt at starving off a recession. Surely the John Doe don't fall for this. They may be nieve, but they are well educated. Smoke and mirrors have been going on too long, and the Fed has been called to show their hand.

The problem is, they were bluffing... They had nothing!


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## vishalt (23 January 2008)

SPI up 3.6%

It is going to be a good day


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## Snakey (23 January 2008)

vishalt said:


> SPI up 3.6%
> 
> It is going to be a good day




Agreed the US had monday holiday and their tuesday morning trading reflected what they miss on monday but tuesday afternoon then shows the turn around from the 0.75 rate cut. Glad I filled up yesterday... I say green for three days straight on ASX.


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## Awesomandy (23 January 2008)

I think this is it - the last chance to unload any long positions before everything comes tumbling down. (No research, just gut feeling and assumptions based on current conditions)


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## champ2003 (23 January 2008)

ShareIt said:


> This could be a bad move.... it now confirms that the US economy is sinking!




Actually it just confirms that they will do anything that they can to ensure that they don't sink.

Whether or not this strategy works, well time will tell.


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## CamKawa (23 January 2008)

Awesomandy said:


> I think this is it - the last chance to unload any long positions before everything comes tumbling down. (No research, just gut feeling and assumptions based on current conditions)



+1 

That's my feeling to, providing the market does actually go up today, it mightn't stop tumbling down. The DOW is currently down -1.09% and not looking good.


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## CamKawa (23 January 2008)

*Re: EMERGENCY RATE CUT*



Smurf1976 said:


> Looks like the great inflation is getting underway...



I agree, US inflation here we come. Cutting rates isn't going to solve the credit crisis, but Ben has to look as though he's doing something.


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## Kauri (23 January 2008)

Buffettology said:


> Yeh, absolutely striking! Obviously trying to make a statement, but really leaving them powerless at their scheduled meeting in a few days. If they drop rates again, it will show just how bad they see the underlying data. Afterall, they know a LOT more than us and a LOT earlier and this will probably just cause a further sell off!
> 
> The feelings on where the DOW will finish from what I hear are also completely mixed. They say there are as many opinions as there are brokers! Everyone has one and their all different!
> 
> ...




The general feeling in the  market now is for another 50 bp rate cut at the Jan 30 FOMC and Fed funds to fall to 2% by September. Fears are growing though that the Fed move means that the economy is worse than thought. After all, when they felt hard done by Bush stimulated them and then BB bent over for them... and already they reckon they want seconds...at least..
Cheers
..........Kauri


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## Buffettology (23 January 2008)

Kauri said:


> The general feeling in the  market now is for another 50 bp rate cut at the Jan 30 FOMC and Fed funds to fall to 2% by September. Fears are growing though that the Fed move means that the economy is worse than thought. After all, when they felt hard done by Bush stimulated them and then BB bent over for them... and already they reckon they want seconds...at least..
> Cheers
> ..........Kauri




Yeh, that would be incredible and unprecedented from my memory!  

But something had to be done so I could offload back into some cash!  Then get out and wait for the next big crash!  Trouble is, next time, NOTHING can be done!  What are they going to do, lower the cash rate to 0.............?  I think next time they will have to establish a bottom and ride it out.


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## skating101 (23 January 2008)

Buffettology said:


> Yeh, that would be incredible and unprecedented from my memory!
> 
> But something had to be done so I could offload back into some cash!  Then get out and wait for the next big crash!  Trouble is, next time, NOTHING can be done!  What are they going to do, lower the cash rate to 0.............?  I think next time they will have to establish a bottom and ride it out.




bennies delaying delaying delaying so that he can quit before the drop so at least he can say he wasnt in charge when it happened


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## white_goodman (23 January 2008)

germany 1923?


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## ROE (23 January 2008)

America is in so much debt they cant face a slow down...Cutting rate just delay the problem and sooner or later they have to face the music.

The longer the music play, the bigger the bang


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## numbercruncher (24 January 2008)

Clients of the Fed are now getting money cheaper than consumer price inflation and every chance of it getting cheaper, Money is free baby!

trouble brews with a T


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