Ironic really. It was low interest rates that put you in the hole in the first place. The remedy is a little like snake serum. You cure the poison with a little poison and watch the patient carefully. regards f9
my thoughts too, it would basically create a period of even easier money than the one in early part of the decade, it would stimulate hyper growth for a short period (and stocks would probably rally hard) and then an even bigger bust.
The Fed / Treasury is running out of bullets, however they do still have room to cut all the way to zero. Whether or not rate cuts make much of a difference in months down the track is another thing.
Cramer is right about one thing. Cutting would give banks a chance to catch their breath and reload their balance sheets. It would save the government a ton of money that will otherwise go to mortgage bailouts. Inflation? Does Japan have an inflation problem? Bernanke will have to lose that deer frozen in the headlights approach though and get ahead of the curve for once. Can't really see that happening.
Interesting how I got flamed when I suggested that if the fed was to make any kind of move it would be an ease not a hike
i dunno when you suggested that but if you suggested it when euro was 1.50+ and oil was $140 THAT MIGHT HAVE BEEN A problem, this market is so confused that everyone's opinion is changing daily, we need to see some leadership from the fed.
ransquawk just reported there are rumors going around about an emergency rate cut today, which might be the cause of the spike in the markets. Also a rumor about Goldman buying Lehman for $11.50 a share.
I doubt they'd need to pay that much of a premium. If anything, I think a GS acquisition is done below the market price at the time of the announcement.
The Fed is based on loaning currency to the treasury AT INTEREST. Even if the discount rate is zero, the Fed still makes money on the taxpayers with its Monopoly money, and has since 1913.