Thursday, Aug 16, 2007
Cheap money propping things up again! - Is it too late?!?!
Bloomberg: Fed Has Already Introduced `Temporary' Easing:
The U.S. Federal Reserve has already introduced a ``temporary'' reduction in interest rates by driving the four-week Treasury bill below the Fed funds target, says Charles Diebel, a strategist at Nomura International in London.
``It is clear that a `temporary' easing has been put in place by the Fed,'' Diebel wrote in a research note today. ``This is what has really spooked markets overnight.''
Posted by tyrellcorporation @ 12:07 PM (674 views) Add Comment
14 Comments
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1. waitingfor hpc said...
so what does that mean then?
2. tyrellcorporation said...
Cheaper lending (than the US base rate) to banks, etc to keep them going.
3. waitingfor hpc said...
but will help? will stop a crash?
4. george monsoon said...
I don't think this will stop a crash.. it will probably slow it down by a few DAYS!!
5. Crazylegs said...
how can the disease, also be the cure ?
its like watching an addict in cold turkey asking for just a little bit more.
please sir, can i have some more ....
6. mrmickey said...
Is this just really the Fed buying time for the big boys to get their money out while telling the man in the street that everything is fine don't panic your pension and investments are safe.
7. david20040_0 said...
Hmmm interesting, looks like a big crasg may be on the cards after all.
However I still reckon this is probably near the bottom. Though I hope it isn't.
8. Mrbenn said...
What makes you think that this is near the bottom david?
9. This comment has been removed as it was found to be in breach of our Blog Policies.
10. Quiet Guy said...
IMHO, the thing we should all be focussing on is debt. A tsunami of cheap money has gotten us out of the habit of saving and paying our way.
Recently, I spoke to a work colleague who told me his property investment plan: he will buy a place then build an extension then 'flip' it back into the market in a year or two.
I feel sorry for people who just want to buy a space for their family to live in but there are still lots of speculators out there.
The Fed can play with the money supply all they like. In the end we will have to pay.
11. Symo said...
David I really must admire your rose tinted glasses. This is round one. I expect a small recovery but by the end of September the huge corporate investors will have withdrawn their funding and then a big crash is on its way. Note that on Tuesday I think it was JP Morgan told all its investors to buy, yet one of their advisors on Radio 4's today prgramme said this is not the bottom of the market by a few months.
Some of my friends who are big bears (me I am more neutral) are predicting sub 5000 numbers on the FTSE by close of the year because at that point over half the sub prime problems will be exposed. After that though it will take years to tank past the previous highs. Their opinion not mine. My money is now sat in an ISA.
12. harold said...
So just what is a "free market" when central bank openly prop it up with money they magic out of thin air? Ultimately this just creates inflation and thus robs savers of their money.
13. bidin'matime said...
Timing is going to be crucial. All this extra cash sloshing around must lead to inflation and an erosion of the buying power of savings, but in the meantime we shall see an attempt to shore up the currency by increasing IRs, which will of course will bring asset values tumbling down. Then will be the time to invest in assets that provide a hedge against the ensuing inflation, the most obvious one being property.
We’ve had the easy bit – sitting round predicting the crash – the hard bit has yet to come…
14. sold 2 rent 1 said...
bidin'matime,
I disagree.
Gold is the next mania.