Measure of "Helicopter" Bernanke who does not hesitate to continue injecting money to calm the stock markets, consumers and generally to the economy. Discount rate to 3.5%
Good dose of Valium for the markets.
Result: They climb up the bags and get in the euro. Moment of the future of the U.S. stock market fall, but it was expected.
Full text of the EDF:
"The Federal Open Market Committee has decided to lower its
target for the federal funds rate 75 basis points to 3-1/2 percent.
The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth.
While strains in short-term funding markets have Eased somewhat, broader financial market conditions have continued to deteriorated and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some work in Softening markets.
The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.
Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks "
Written by Carlos Lopez on Jan. 22, 2008 with 176 comments
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The bag, the web server ... everything is broken. And that is when the nerves jump, you lose the reason and logic.
If we had to find a case in the current stock situation, the usual blog and know and encontraríais in the housing bubble and the crisis of mortgages in the U.S. with its resultant loss of confidence in the banking system.
The consequences of a crash of this caliber are not good for anyone, if this had been done in an orderly manner (you know, a "soft landing") would have time to act with reason and logic, punishing only those securities plunged into crisis . But now they are paying all, which could create some opportunities, but for now it is best not to look (my advice is not to play on the stock market these days that there is a lot of sharks out there)
At the macro level, if this continues, the central banks will be forced to lower rates to revive the economy, this would be the medicine that would ease the pain somewhat of a disease that does not want anyone, because there is no benefit. Nor mortgaged, they would pay less each month, but would have more risk of being left without work because their houses worth less. Neither savers who would like their financial assets would be reduced. Do not forget that between yesterday and today, repende percent of assets have disappeared billions of Euros.
But ... is it for so long?
The multimillionaire investor George Soros said the world is facing the worst financial crisis since the Second War Mundialy that the U.S. is under threat of a recession. "The situation is much more serious than any other financial crisis since the end of World War II," Soros said, according to an interview with the Austrian daily Standard Daily. He noted that over recent years, politicians had been guided by some basic misunderstandings from what he called the "market fundamentalism", in the belief that financial markets tend to act toward a balance. "That is a misconception," he said. "Actually we have a serious financial crisis now," he added. To be consulted on whether he thought that America was headed to a recession, said: "Yes, this is a threat in the United States." He added that he was surprised about the little understanding that there had been about how the recession was also a threat to Europe.
The truth is that the crisis was coming since the summer, but between politicians, analysts and other professionals living in the worlds of yuppies, as they say in Negocios.com markets have sailed too happy time and is now waking up to see when you touch who are in a mental hospital, not knowing whether to buy, sell or thrown out the window. Nobody knows.
Therefore, I stay close to this phrase Blas Calzada: "Central banks will have to lower rates tomorrow or past" What think?
Written by Carlos Lopez on Jan. 22, 2008 with 379 reviews
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