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View Full Version : Feds expected to cut key interest rate



Hallett
09-18-2007, 08:06 AM
http://news.yahoo.com/s/ap/20070918/ap_on_bi_ge/fed_interest_rates

cdog
09-18-2007, 09:14 AM
I hope they do. This whole thing has gotten out of control. We need a 1% cut by the first of the year. As usual the retards are late to the party.:)

essexjet
09-18-2007, 10:23 AM
Fed cuts key rate by half-percentage point
Reduction in benchmark will lower borrowing costs, could calm markets
BREAKING NEWS
MSNBC staff and news service reports
Updated: 3 minutes ago
The Federal Reserve Tuesday responded aggressively to a housing downturn that threatens to spread to the broader economy, cutting its main benchmark interest rate by a half-percentage point and broadly lowering borrowing costs.
It was the first time in more than four years the central bank cut the main federal funds rate, which had been unchanged since a long series of rate hikes that ended in June 2006. The fed funds rate, which is what banks pay to borrow money overnight, now stands at 4.75 percent, down from 5.25.
Fed Chairman Ben Bernanke, facing his first major test since taking over from Alan Greenspan in early 2006, has been sending signals that he is prepared “to act as needed” to cushion the impact on the economy from the market turmoil.
Most economists predicted that Bernanke and his colleagues would choose to reduce the federal funds rate only by a quarter-point although a minority correctly predicted the bolder half-point move. But analysts agreed that the Fed's move Tuesday is unlikely to be the last word on the subject.
Many economists are predicting a string of three or more rate cuts as the central bank works to calm financial markets and keep the worst slump in housing in 16 years from pushing the country into a recession.
“We have a very soft economy, and if the Fed doesn’t lower rates then the economy could fall into a recession,” said Mark Zandi, chief economist at Moody's Economy.com.
Zandi has trimmed his forecast to show economic growth of around 2.5 percent in the current quarter, down sharply from 4 percent in the April-June quarter. He said the fourth quarter is likely to be even weaker at around 1.5 percent.
Analysts believe the Fed has room to cut rates because inflation pressures have been easing. In good news on that front, the Labor Department reported Tuesday that wholesale prices fell by 1.4 percent in August. It was the biggest drop in 10 months and much larger than the 0.3 percent fall that had been expected.
The slump in housing that began last year has sent delinquencies on subprime mortgages, loans make to people with weak credit histories, soaring to record levels. The rising delinquencies and foreclosures have caused a serious credit crunch as investors have grown worried about other types of loans, a development that has roiled global financial markets.
All of this turmoil has forced a radical about-face at the Fed since its last meeting on Aug. 7. At that time, the Fed left the funds rate unchanged and declared that its predominant concern was still that inflation would fail to moderate as expected.
However as conditions in financial markets grew more turbulent, the Fed began aggressively pumping extra cash into the banking system and on Aug. 17 announced a surprise half-point cut in its discount rate, the interest that it charges to make direct loans to banks. The lowered the discount rate another half-point Tuesday.
In explaining the August move, Fed officials did not mention inflation at all and instead said that “the downside risks to growth have increase appreciably.”
Private forecasters said that worry is not misplaced, given that all but two of the housing downturns that have occurred since the end of World War II have been accompanied by recessions.
“You get as big a decline in housing as we are looking at and that is serious business,” said Lyle Gramley, a former Fed governor and now an analyst at Stanford Financial Group in Washington. “I think we will escape a recession, but just by the skin of our teeth.”
In one jarring note, employment fell in August by 4,000, the first outright decline in four years, with manufacturing and construction leading the job losses.
But economists said they believed that Bernanke, who wrote extensively as an economics professor on the Great Depression that followed the 1929 stock market crash, understands what needs to be done to avert downturns.
“We have had a long history of financial panics and if we have learned anything, it is that you shove money at them,” said David Wyss, chief economist at Standard & Poor’s in New York.
While some have complained that Bernanke has been more tentative than Greenspan would have been, no less an authority than Greenspan disagrees.
Doing a round of interviews to promote his new book, Greenspan, who was Fed chairman for 18½ years, said Bernanke was “doing an excellent job” and he doubted that he would have done anything differently.

ChumpChange
09-18-2007, 10:36 AM
Protecting the idiots. :rolleyes:

Jyruiz
09-18-2007, 10:47 AM
Protecting the idiots. :rolleyes:
Exactly what I was thinking.

BoatFloating
09-18-2007, 10:53 AM
Protecting the idiots. :rolleyes:
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?

Cole Trickle
09-18-2007, 10:55 AM
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?
You must be in the buizz;):D:eek:
When it goes down a full point it will be time to re-fi my safe10 year fixed loan:):)

essexjet
09-18-2007, 10:57 AM
You must be in the buizz;):D:eek:
When it goes down a full point it will be time to re-fi my safe10 year fixed loan:):)
You mean your adjustable rate loan :)
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?
All of the above.

BoatFloating
09-18-2007, 11:01 AM
You must be in the buizz;):D:eek:
When it goes down a full point it will be time to re-fi my safe10 year fixed loan:):)
The Wholesale side. Trust me there still is monkey brokers out there a lot of good ones left and few stayed. I love the stated retired deals. Me: "why are you going stated retired" Loan Officer: Uh, because they can't qualify full doc" Me: "how much do they get in retirement"? Loan Officer: " $1500 a month". Me:"Well their new payment is $2200". Loan Officer: "That's why I have to go stated duh".

It's Only Money
09-18-2007, 11:04 AM
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?
I define idiots as those folks that signed on the dotted line for a loan they couldn't afford. Brokers didn't put a gun to their heads and say (paraphrased): "Either your signature is on that line or your brains".
I define idiots as the "flippers" that thought they'd score a big profit and ended up holding houses that were worth less than they paid.
I define idiots as the "investors" buying 3 or 4 brand new homes expecting to sell them and turn profit when the next phase of the development was released.
I define idiots as the people using the bank of equity to take money out of their "bank" expecting the home values to keep climbing indefinitely.
I define idiots as the the people that kept getting seconds and thirds on their primary residence to buy second house or expensive toys such as boats, cars and planes. If you can't afford it without refi'ing to 110% of the inflated value of your Inland Empire "estate" then you maybe shouldn't be trying to live the high life like those that can afford it.
If you truly believe that all those millions of "idiots" were really and truly bamboozled then YOU are the idiot.

My Man's Sportin' Wood
09-18-2007, 11:07 AM
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?
The brokers didn't MAKE anyone sign a loan. If people were misled, it's because they were IDIOTS who didn't read the paperwork or believed a loan officer who works on commission. They are not victems.
I heard an ad for bankruptcy on the radio telling people to stop feeling obligated to the credit card companies who kept giving you credit you couldn't afford. Hello! It's not the credit card companies fault you went out and spent money you didn't have and now can't afford to pay it back. You shouldn't have went out to dinner and bought everything under the sun on borrowed money. It's called taking responsibility for your actions.
If you agreed to the loan, you need to pay it back. No matter what the terms. Are you a man or woman of your word or not?
--not using the word "you" at anyone in particular, just irresponsible borrowers in general.

DILLIGAF
09-18-2007, 11:12 AM
I sure feel bad for not selling all of my stock holdings last week :)
Lesson is never try to time the market. Keep your money in companies you understand what they do, that are solid financially, have a REAL product and have strong leaders. Timing the market usually DOES NOT work in your favor.

Cole Trickle
09-18-2007, 11:24 AM
You mean your adjustable rate loan :)
All of the above.
30 year fixed with the first 10 being locked intrest only.
I knew when I bought my house last may that the rates were gonna go down and I wasn't thrilled with a 6.75 fixed for 30 years. shoot rates were going up by the day my escrow got pushed a week and it costs me $200.00 a month.
Now if they would just raise the standard limit to 500K+ I would be golden:D

essexjet
09-18-2007, 11:31 AM
30 year fixed with the first 10 being locked intrest only.
I knew when I bought my house last may that the rates were gonna go down and I wasn't thrilled with a 6.75 fixed for 30 years. shoot rates were going up by the day my escrow got pushed a week and it costs me $200.00 a month.
Now if they would just raise the standard limit to 500K+ I would be golden:D
That is an awesome fannie mae product!! I try to get most of my customers that have short term plans with there house into that loan.

MissB
09-18-2007, 11:31 AM
The brokers didn't MAKE anyone sign a loan. If people were misled, it's because they were IDIOTS who didn't read the paperwork or believed a loan officer who works on commission. They are not victems.
I heard an ad for bankruptcy on the radio telling people to stop feeling obligated to the credit card companies who kept giving you credit you couldn't afford. Hello! It's not the credit card companies fault you went out and spent money you didn't have and now can't afford to pay it back. You shouldn't have went out to dinner and bought everything under the sun on borrowed money. It's called taking responsibility for your actions.
If you agreed to the loan, you need to pay it back. No matter what the terms. Are you a man or woman of your word or not?
--not using the word "you" at anyone in particular, just irresponsible borrowers in general.
Totally agree....

WYRD
09-18-2007, 11:38 AM
The brokers didn't MAKE anyone sign a loan. If people were misled, it's because they were IDIOTS who didn't read the paperwork or believed a loan officer who works on commission. They are not victems.
I heard an ad for bankruptcy on the radio telling people to stop feeling obligated to the credit card companies who kept giving you credit you couldn't afford. Hello! It's not the credit card companies fault you went out and spent money you didn't have and now can't afford to pay it back. You shouldn't have went out to dinner and bought everything under the sun on borrowed money. It's called taking responsibility for your actions.
If you agreed to the loan, you need to pay it back. No matter what the terms. Are you a man or woman of your word or not?
--not using the word "you" at anyone in particular, just irresponsible borrowers in general.
its not gonna be the average Joe that borrowed more than he could afford that is screaming for government bail out, its gonna be the brokers that are holding the ten of thousands of bad notes out there. All the time they will be blaming the Joe Blow homeowner that tuck tailed and ran, rest assured none of them will step up to the plate and take their lashing for their wrong doing in approving or overstating the loan. Once again "Uncle Sam" will bear the weight of the collapse:rolleyes: :rolleyes:
If you ask me The Idiot is the one left holding the bag of burning shit in the end...:)

HOOTER SLED-
09-18-2007, 11:42 AM
You must be in the buizz;):D:eek:
When it goes down a full point it will be time to re-fi my safe10 year fixed loan:):)
Ditto. :)

Cole Trickle
09-18-2007, 11:48 AM
Ditto. :)
Then we will be ballers!!!!:D:D:eek:

HOOTER SLED-
09-18-2007, 11:52 AM
:D Then we will be ballers!!!!:D:D:eek:
Shit, you already are. I may just be able to squeek into baller status though. :D

Nord
09-18-2007, 11:54 AM
What idiots??? The brokers for putting people in loans they couldn't afford when they adjusted? The brokers that over stated the borrowers income just so said broker could make money? Or the ecomony that is heading south in a hurry if they let it rides it self out?
Good post here......
But the people who let them create these loans for them should be blamed as well.

Cole Trickle
09-18-2007, 11:58 AM
:D
Shit, you already are. I may just be able to squeek into baller status though. :D
Bitch...You gots a pool,green grass and a guest house!!!:devil: :D :eek:

INSman
09-18-2007, 12:32 PM
I sure feel bad for not selling all of my stock holdings last week :)
Lesson is never try to time the market. Keep your money in companies you understand what they do, that are solid financially, have a REAL product and have strong leaders. Timing the market usually DOES NOT work in your favor.
Correct, correct and correct. The "Shorts" are busy covering their ARSES right now that just got handed to them on a silver platter. Only try to time the market if at all when you are getting close to retirement or really needing the money.
Would have lost out on a nice 5 figure gain today if I would have panic sold last week like some did. :eek: :)

Ion
09-18-2007, 12:35 PM
I sure feel bad for not selling all of my stock holdings last week :)
Lesson is never try to time the market. Keep your money in companies you understand what they do, that are solid financially, have a REAL product and have strong leaders. Timing the market usually DOES NOT work in your favor.
I jumped back in before yesterday's close. Bought low, and now...the big question is: will there be a big sell-off tomorrow?

DILLIGAF
09-18-2007, 12:45 PM
I jumped back in before yesterday's close. Bought low, and now...the big question is: will there be a big sell-off tomorrow?
Good for you and I hope you have continued success. I look at the day to day stuff as I get bored :), but I don't really react to it as all my stuff is long term. Well, a very small amount of stuff I can play around with short-term wise but not anything substantial.
As far as the possible sell off tomorrow....DIFINO
:)

DILLIGAF
09-18-2007, 12:46 PM
Correct, correct and correct. The "Shorts" are busy covering their ARSES right now that just got handed to them on a silver platter. Only try to time the market if at all when you are getting close to retirement or really needing the money.
Would have lost out on a nice 5 figure gain today if I would have panic sold last week like some did. :eek: :)
I think shorts got hit on Cree over the last week or so. That continued rumor of a buyout by GE or is still around......

cdog
09-18-2007, 01:33 PM
30 year fixed with the first 10 being locked intrest only.
I knew when I bought my house last may that the rates were gonna go down and I wasn't thrilled with a 6.75 fixed for 30 years. shoot rates were going up by the day my escrow got pushed a week and it costs me $200.00 a month.
Now if they would just raise the standard limit to 500K+ I would be golden:D
Look at you, Talkin like a pro.;)
Conforming rates will improve and non conforming spread will get a little better but most of the foreclosures will still come in and price's will continue to drop due to the lending problems form 2002-2006. This will kick a lot of people between the legs when they go for their appraisals and refi’s. The market determines the rates Not the fed! They won’t let up until the risk is cycled out of the market.
But this is a step in the right direction. I think we’ll see more cut’s before the first of the year.

Cole Trickle
09-18-2007, 01:39 PM
Look at you, Talkin like a pro.;)
Conforming rates will improve and non conforming spread will get a little better but most of the foreclosures will still come in and price's will continue to drop due to the lending problems form 2002-2006. This will kick a lot of people between the legs when they go for their appraisals and refi’s. The market determines the rates Not the fed! They won’t let up until the risk is cycled out of the market.
But this is a step in the right direction. I think we’ll see more cut’s before the first of the year.
lol....I have learned more on HB than college;):D
I wonder if I should put UCHB on my resume:idea: :devil: :eek:

riverroyal
09-18-2007, 06:05 PM
was that the amount cut today?My wife is back to 14 hour days..yeah

DILLIGAF
09-19-2007, 10:12 AM
Correct, correct and correct. The "Shorts" are busy covering their ARSES right now that just got handed to them on a silver platter. Only try to time the market if at all when you are getting close to retirement or really needing the money.
Would have lost out on a nice 5 figure gain today if I would have panic sold last week like some did. :eek: :)
I think most of the CREE action today is shorts covering combined with the news I posted below. I still hold it and am up 48% on it :)
You sold yours, right?
Renewed rumors that General Electric might purchase Cree have, once again, sent shares of the latter firm higher.
In early-afternoon trading Wednesday, Cree (nasdaq: CREE - news - people )rose 6.8%, or $1.98, to $31.20 on fresh speculation that General Electric (nyse: GE - news - people ) would buy the LED chip maker.
LEDs, or light emitting diodes, are seen as the future on the lighting market, which remains dominated by incandescent light. Many analysts believe LEDs will eventually displace incandescents for several reasons, including superior energy efficiency and longevity.
Wednesday’s moves are effectively a repeat of August 31, when unsubstantiated GE buyout talk lifted Cree 9.5% to $26.60 (See “Rumors Of GE Buyout Lifts Cree”).
Present rumors aside, Morgan, Keegan & Company analyst Harsh Kumar believes Cree will eventually be bought, either by GE, or another firm. As the only publicly traded U.S. company with the technology for making LED lights, Kumar sees Cree as a “gateway stock,” meaning that as the industry moves in a certain direction, Cree has the technology to lead the way.
American Technology Research analyst Andrew Huang said that if GE hopes to remain in competition with Amsterdam-based Royal Philips Electronics (nyse: PHG - news - people ), buying Cree is a logical step.
On Monday Amsterdam-based Royal Philips, the world’s largest lighting company, completed a $731 million acquisition of Color Kinetics, a digital lighting maker. Huang noted that over the past two years, Philips has made a string of acquisitions in the LED market. "We believe the trend clearly illustrates Philips', and our view, that LED lighting will eventually replace all sources of lighting," Huang said.
Kumar pointed out that with a price-to-earnings ratio of 40.37, Cree might look expensive, but is in-line with other so-called "green" technology firms.

DILLIGAF
09-19-2007, 10:35 AM
Just thought I would post some of the stocks I own. They are from best preforming to worst preforming. JDSU has been a big negative on my holdings. One of these days I will be rich if it turns around.....lol
These stocks are spread accross into different types of business. I am also in bonds and money market accounts with money for messing around with. As I have indicated I try to be spread out in a mixture of some high risk but mostly conservative long term investments.
Anyhow here you go. All but the last three are making me "money". Of course the loss or gain is only real when you sell.
CREE
BRK.B
KO
WWNPX
INTC
FLVIX
PNRA
EUROX
MSFT
UMBHX
BPTRX
BUD
DEFIX
GABEX
OAKGX
SMMVX
CAMOX
MGIDX
NOSGX
WTIBX
SCEMX
PFE
USG
JDSU