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Fed cuts rates by 0.50%

Discussion in 'Business, Investment and Economics' started by vishalt, Sep 19, 2007.

  1. vishalt

    vishalt

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    Oh my god, US stocks are SOARING, I think this rally is going to be short term, the US dollar is collapsing below 16 year highs now, gold/oil/inflation are going to SURGE.

    Could this get any more interesting!!?!?
     
  2. wavepicker

    wavepicker

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    Re: Fed cuts rates by 1/2%

    Market is soaring, could be start of a bigger move lasting a few weeks.
    Dollar is plummeting, could be the start of the last major move down before a major reversal starts.

    Fed trying to bring back the bubble but will fail misreably IMO in the longer term :)
     
  3. chops_a_must

    chops_a_must Printing My Own Money

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    Re: Fed cuts rates by 1/2%

    Woweee!

    Looks as if the USD is going to set a capitulation low sometime soon, which is probably needed...
     

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  4. wayneL

    wayneL Rotaredom

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    Re: Fed cuts rates by 1/2%

    Just an observation: There has been very little movement at the long end of the yield curve as a result of the cut today. In other words, so far no likely affect on borrowing rates.

    6270804.gif
     
  5. noirua

    noirua

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    Re: Fed cuts rates by 1/2%

    At least the world can see that the Fed is willing to forget the inflation data in favour of helping US growth. Other countries may well fall into line in the coming months, and perhaps show that they can take a more liberal look in the mirror.

    Australia needs to take the lead and slam interests rates back to 5% and see the prospects of higher profits from miners and other commodities.
     
  6. Aussiejeff

    Aussiejeff

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    Re: Fed cuts rates by 1/2%

    So, correct me if I'm wrong about these two possible effects of Bernanke's Bouncedown...

    (a) Given that there will now be a significant disparity between US and Oz interest rates and Australias supposedly strong internal economy, it is likely that significantly more foreign investment will flow into Oz, possibly increasing pressure for inflation and even higher interest rates over the medium term here?

    (b) Given that China has been and will continue to up it's interest rates to try and keep a lid on their economic growth rate, Bernanke's cut will now inevitably lead them to start dumping their holdings of $US debt due to the poorer return (leading to a massive blowout in US foreign exchange debt) and conversely lead to even more rapidly increasing foreign investment in China?

    In the end, how far can the US's foreign debt blow out before they kiss their ***ets goodbye?

    Cheers,

    AJ
     
  7. Aussiejeff

    Aussiejeff

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    Re: Fed cuts rates by 1/2%

    Well, the upside of "Bernanke's 50 Basis Points Bonus" didn't last long, did it! Two lousy days and he is already announcing much more pain ahead with loan resets - sounds real promising.

    I wonder how much further they are likely to throw interest rate cuts at this problem. The inflationary downside from the last 1/2% drop has resounded around the globe, with the $US tanking and the cost of goods/services in the US (thus inflation) guaranteed to jump. One wonders what will happen to the greenbuck and inflation if the US cuts up to another 1-2% over coming months in a futile attempt to control their impending recession but "inadvertently" most likely quickening their slide from the top of the world's economic heap?

    AJ
     
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