OT: Fed cut 1/2 pt

[pico]

what took them so long to finally do this.

dow up 310 pts on market open

10-yr bond up .13 to 4.73%

they should really keep greenspan until he dies...he would pre-emtives cut the rates rather than react to the market

[ShamsWoof10]

It wasn't the Fed Funds rate they cut... It's the discount rate...

[The HG]

what took them so long to finally do this.

What took them so long was they're trying to protect the dollar. The ECB has been raising rates and wants to do it yet again in September. ECB rates going up and Fed rates going down weakens the dollar, and that is very bad for the US deficit because it puts pressure on everyone who finances the US deficit to stop buying US govt bonds and to pull out of the dollar. If that happens, the already-expensive deficit will just get more and more expensive, the dollar will weaken further, and so on and so on. Hopefully it won't ever get too ugly, but it's not looking good now, especially since the American people don't seem to understand what is going on and why, and keep voting for high-spending low-taxing big-deficit Republicans.

[isetcap]

I want some high-spending high-taxing people in office.

[isetcap]

What I don't really understand is why the ECB is infusing enormous amounts of money into the markets yet wants to maintain a rate-raising position. The cash infusion effectively lowers your basis by making cash more readily available across the board, but then it is counteracted by raising the lending rate. It would seem that all you have done is created an availability wash while exposing yourself to significant deflationary factors through policy. I truly don't know what they're trying to accomplish so I'll assume they do.

[chachi]

don't give the ECB that much credit ... central banks are usually either too soft or too hard at the wrong time