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Shares Recover As Us Cuts Rate

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I thought interest rates where a tool to control inflation, not just used to bail the stock market out...

It seems any government can now just drop a IR if it wants to keep stocks buoyant.

The rich have to maintain there wealth at all costs..

http://uk.biz.yahoo.com/17082007/140/share...-cuts-rate.html

Markets on both sides of the Atlantic reacted positively after recent losses with the FTSE 100 (news) index clawing its way back above the 6,000 mark to finish trading on 6064.2. In the US there were also further signs of recovery after the Federal Reserve cut the rate it lends money to banks and also injected another six billion dollars into the financial system.

It proved to be an unpredictable day for the FTSE which intially went up, then down, and then back up again on hearing about the US interest rate decision.

It is extremely rare for the Fed to tweak rates outside of a scheduled interest rate meeting.

It last did so on September 17, 2001, after the terror attacks that targeted New York and Washington.

Analysts on both sides of the Atlantic are still advising shareholders to sit tight and ride out the storm.

A statement from the US Federal Reserve said: "Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward."

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This market is shot. The Fed showed so yesterday. There will be a rise to around 1480/1500 S&P then a further 15% fall making a total fall of c 20% from the recent highs. It might even be 30%.

That would be a buy alright. Mind you so will 20%.

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