Fed Expected To Cut By 1%

[A.steve]

http://uk.reuters.com/article/businessNews...762124220080318

Does anyone know when the score will be announced?

[Paddles]

How long to go before the USA have negative interest rates?

[drrayjo]

http://uk.reuters.com/article/businessNews...762124220080318

Does anyone know when the score will be announced?

18.15 our time.

[domo]

Yet another 500pt rally in the dow??

[Bardon]

Opening Bell in 90 mins

[Realistbear]

How long to go before the USA have negative interest rates?

If inflation is around 5% they already have negative IR. The kind of fuel that inflation feeds on.

[lets get it right]

With so many commentators saying that cutting rates is adding fuel to the fire - why are there so many other commentators clamouring for the Fed to cut, cut, cut. Can't they see what is happening to the dollar.

Stories around now of people refusing to swap US dollars for other currencies. This ought to make a lot of Americans ashamed. The world's reserve currency has become a basket case. When are they going to realise they've played the interest rate cut hand and it hasn't worked. Playing it again will make things worse.

Is it just me? Are they thick? Or obstinate? Didn't they see what happened in Japan?

[bob monkhouse]

So im guessing its already priced in...is that whats lifting FTSE (in conjunction with overshoot yesterday)?

edit: Im no good at articulating in high finance, but are the markets going to go 'yippeee....free money...look at the commodites and financials soar, lets all get back in' and then the next day going 'say, why did they give us that free money, there must be a catch, i want out...im getting fitted up like a cheap suit!' ??

?

Edited March 18, 2008 by bob monkhouse

[Bardon]

It's obvious that the Fed and government officials are trying to aid credit markets and the economy, but have absolutely no intention of doing anything to help the dollar.

[babesagainstmachines]

It's Great Depression II. Get used to it.

Rates will be 0 by summer.

[beans on toast]

Free market my ar$e. FED cutting rates to help the bankers. I expect Bernanke like Blair to get paid millions for giving half hour seminars to the banks once he leaves his job as chairman. The Banks are loving all the free tax payer money being thrown at them.

1% cut has already been discounted by the market.

[VedantaTrader]

With so many commentators saying that cutting rates is adding fuel to the fire - why are there so many other commentators clamouring for the Fed to cut, cut, cut. Can't they see what is happening to the dollar.

Stories around now of people refusing to swap US dollars for other currencies. This ought to make a lot of Americans ashamed. The world's reserve currency has become a basket case. When are they going to realise they've played the interest rate cut hand and it hasn't worked. Playing it again will make things worse.

Is it just me? Are they thick? Or obstinate? Didn't they see what happened in Japan?

A lot of the commentators who I see who say cut cut cut work in investment banks and are fund managers. Its in their interest that the FED cuts rates. The people who say to cut rates at this time believe in the Bernanake school of economics. He is crazy about counterfeiting money as a way out of this mess. However, I see other university professors saying saying he is doing the right thing. Who to believe...?

I stand in the camp that he shouldn't be cutting rates. I listen and read March Faber reports, Jim Rogers, Peter Schiff. These guys know alot about it. They think cutting rates is utter madness. Bernanke studied the Great Depression( the first one,lol) and believes that the FEd not cutting rates caused it. His phd thesis was on this. So he believes that printing money is going to solve this problem.

However Marc Faber who is a genuis, with a phd also said that if he had been marking Mr Bernanke's thesis, he would have give him a pass on one condition. The conditon being that he never becomes a central banker unless of the Zimbabwee. The cause of the Great Depression according to Schiff ,Faber and Rogers was because of easy monetary policy before 1929, namely between 1924-1928.

So one of them is right about the cause...

I know who I beleive is right...based on my own logic also.

Faber, and Rogers and Schiff have been preaching for the last 3 years that what is happening now is going to happen...

a few great quotes from Jim Rogers recently about the FED,

"Bernanke is a nut"

"The whole world knows he doesn't know what he is doing"

"If those clowns on Washington start running those priniting presses then this situation is going to get a whole lot worse"

BTW, Rogers made 3900 percent with Soros in the worst market conditions of the 1970s

he is up 500% on his China investments and nearly 400% i his commodities index.

Its ok being a professor at a UNi and lecturing about your theories and spouting them. But I would rather believe someone who has pu his money where his mouth is and made money from his analysis. In the rel world do these economic professors outcomes really work in real life.

[A.steve]

His phd thesis was on this.

...

"Bernanke is a nut"

I wonder if Bernanke's thesis is available to download?

[bobthe~]

I know who I beleive is right...based on my own logic also.

Faber, and Rogers and Schiff have been preaching for the last 3 years that what is happening now is going to happen...

a few great quotes from Jim Rogers recently about the FED,

"Bernanke is a nut"

"The whole world knows he doesn't know what he is doing"

"If those clowns on Washington start running those priniting presses then this situation is going to get a whole lot worse"

BTW, Rogers made 3900 percent with Soros in the worst market conditions of the 1970s

he is up 500% on his China investments and nearly 400% i his commodities index.

Its ok being a professor at a UNi and lecturing about your theories and spouting them. But I would rather believe someone who has pu his money where his mouth is and made money from his analysis. In the rel world do these economic professors outcomes really work in real life.

So he says inflation, dollar death, gold to the moon?

Jim Slater reckoned agri-stocks in Brazil, although the article (back in the New Year I think) suggested that Slater had probably moved on from there and was only letting people know to squeeze the last bit out of it.

[Methinkshe]

Since a 1% cut has already been priced in, they cannot afford not to - it would spark a panic sell-off. Which leads one to wonder who is in the driving seat? Seems to me, the markets are telling the Fed what to do, not vice versa.

[jpjh]

Darn I still have 20$ in notes.... maybe I can get them changed into dollar bills and roll them up then repackage them as a

Collateralised Rapid Appreciation Paper - With Index Preferred Exit Resoltion Strategy

Edited March 18, 2008 by jpjh

[VedantaTrader]

So he says inflation, dollar death, gold to the moon?

Jim Slater reckoned agri-stocks in Brazil, although the article (back in the New Year I think) suggested that Slater had probably moved on from there and was only letting people know to squeeze the last bit out of it.

Rogers called the bull run in commodities back in 1998 and people laughed at him. He has also been short investment banks for more than 2 years, and short the USD. He sold his house and lives in Singapore now. he has been long oil and gold for a longtime also.

So yes, he agrees gold and inflation to the moon and dollar death.

[Leonard Hatred]

Doom and gloom every day!

[injustice]

[hallander3]

If inflation is around 5% they already have negative IR. The kind of fuel that inflation feeds on.

In a normal situation, I'de agree completely with that inflationary comment. But things are far from normal on this side of the Atlantic. I lived through the great inflation of the late 70s. That was really mad . This time round, so much is different. Wages for one are not rising. Wage price spiral and all that. That isn't in play this time round. Asset prices falling with housing leading the way south. Again another inflation check. The judge is still out on inflation as a result of fed cuts at this point. Seriously, I try to avoid that debate, which is quite hot over her now. I can't even guess where this game is going, nobody can . But with a falling dollar, there are forces working for inflation, yet lower interest rates are being presented to a public too in debt to borrow much more.

[bleakhouse]

How about the full 2pct cut to 1pct pushing DJI to all time highs, giving FP his March rally.

The dollar will take a dive, inflation will increase, but wages can go up thus shortening the time it takes for the falling price of houses to meet the correct level of 1 house = 3 times income. And we will all be saved, ne'est pas?

[nowthenagain]

I'd bet on .75 but there has to be a chance of .50

Not cutting as severly as expected might not spook the markets too much on the back of the GS/Lehman news and might shore up the Dollar a little.

If I were Bernanke I'd go .50 but we all know helicopter Ben perhaps goes into this with a pet theory to protect! It was insanity in my eyes to employ someone like Bernanke, with very preconceived ideas, to a post requiring as much flexible thinking as Fed chairman.

[Venger]

Anyone know of a link where we can watch Bernanke's announcement live?

Thanks. (I'm about to try searching myself too)

[nicotineman]

All it will do is create a new 'carry trade' where investment banks and hedge funds borrow cheaply in the US and take the money to create bubbles in higher yielding currencies, such as the UK - being able to make 3.25% pa for doing nothing other than borrowing in US dollars and putting it into sterling is not bad.

Does anyone know what will happen to the Yen carry trade if they cut 1%?

(30-year, yen basis swap)

see more here

[Methinkshe]

Does anyone know what will happen to the Yen carry trade if they cut 1%?

(30-year, yen basis swap)

see more here

The yen carry trade is already unwinding in response to a weak dollar. Any increased dollar weakness (and IR cuts will exacerbate this) can only cause it to unwind faster.