Fed Cuts Rates By Quarter Point

The Federal Reserve, confronted with surging oil prices and a slumping housing market, on Wednesday cut a key interest rate by a quarter-point, the second rate reduction this year.

The central bank lowered the federal funds rate to 4.5 percent in an effort to stimulate economic activity and keep the country from dipping into a recession. The move will make it cheaper for consumers and businesses to borrow money.

Read full story here.

Comments

[Skeeter05]

The Fed is busy saving the hedge funds from the ravages of capitalism. You know those ravages, the ones that manufacturing workers were told to grin and bear.

Someone needs to tell the Commerce Dept that it needs to promote US small businesses, not just the big businesses that want to export.

[BenBernanke]

Economy UP UP and AWAY 3.9%% !!! drummroll please...
"Huh, we've got to cut rates as the economy is weak"

which is it?

"THINGS ARE GETTING BETTER... MARKET IS UP, UP AND AWAY..." BLA BLA...

TOTALLY AND OPENLY RIGGED MARKETS!

YOU IDIOTS.

**********­**********­**********­**********­***
CITIBANK AND BANKAMERICA ARE ON THE ROPES !
**********­**********­**********­**********­***

DON'T BELIEVE IT?

READ THIS...

http://globalresearch.ca/index.php?context=va&aid=6642

YOU'RE VERY SOON GONNA SEE THE GREATEST RUN ON BANKS IN HISTORY...

REMEMBER AND READ FDIC FINEPRINT.­.. YOU ONLY GET YOUR 100K BACK WITHIN 30 DAYS... BY THEN IT IS WORTHLESS HYPERINFLATED DOLLAR JUNK...

THIS IS NOT A FINANCIAL CRISIS BUT A MARKET DISINTEGRATION!

The fact is... ALL US BANKS ARE TECHNICALLY INSOLVENT.

the faith and credit of US is the same lie as everything else, democracy, free markets, capitalism, the Bill of Rights, etc... all lies... the jig is up!

EMERGENCY ! RUN TO YOUR BANK GET ALL YOUR CASH OUT! FDIC IS A SCAM FOR HYPERINFLATED WORTHLESS DEVALUED DOLLARS! CONVERT ALL YOUR CASH INTO €UROS, RUBLES OR YUAN (CAN BE DONE IN TRAVELER CHEQUES)

DON'T DO IT AND YOU WILL LOSE EVERYTHING, GUARANTEED!

The dow will lose more than 10.000 before Xmas.
The dollar will collapse before Xmas.

Everybody's credit is about to be fucked anyway... Repay nothing, go max out the cards on cash advances and convert it all in €uros (or better Rubles and Yuan)

and hurry... a run on the banks is next... get your money out while you can...

http://globalresearch.ca/index.php?context=va&aid=6534

want some background reading? (form Bank of Int'l Settlements)

http://globalresearch.ca/index.php?context=va&aid=6209

MUST READ EXCELLENT ECON 101 review:

http://onlinejournal.com/artman/publish/article_2304.shtml

http://onlinejournal.com/artman/publish/article_2310.shtml

http://onlinejournal.com/artman/publish/article_2316.shtml

[BuyRubles]

DO YOU WANT TO MAKE BIG MONEY DURING A DEPRESSION?

Buy wheelbarrow stocks. Americans will need them to haul around their worthless cash in a few years.

[fourex]

Fed had no choice. No cut and the stock market falls, a half point cut and you can wipe your ass with the Bush Dollar.
PS. Philippine Peso up 5% against Bush Dollar today.

[leftLibertarian]

A Fed Cut happens when Wall Street cries to their Big Mummy Gubmit for help

[VivaZapata]

On this one the real conservatives are right. Cutting the fed again and ensuring increased prices is only going to hurt people not making a high wage and older folks on fixed incomes. This will subsequently hurt business. It is however good for the insiders who knew already what was going to happen and have invested accordinly. The biggest enemy of all, save the financiers, is the federal reserve.

[Richard729]

As I mentioned in an earlier post this morning the cut in interest rates for the fat cats on Wall Street who double-deal in hedge funds and other sleight-of-hand tricks that allow them to avoid paying taxes, Bush depends on Feeding Chairman, Ben Bernanke, to fortify his Potemkin Village economy that has engaged in the biggest borrowing binge in U.S. history.

The fat cats “no-seeum” taxes are on a borrowing binge similar to the halcyon days of former Feeding Chairman Alan Greenspan who handed out free money at 1% interest, essentially doling out a huge government­-subsidize­d, socialized program to the corporate thieves and swindlers.

Greenspan, in his book and memoirs, The Age of Turbulence: Adventures in a New World," now thinks those policies were wrong. Though it’s a little late for his mea culpa, Greenspan achieved god-like status among the Ponzi Scheme boys on Wall Street for bulking up their portfolios while ordinary working Americans struggled to make ends meet, many of whom are living payday to payday.

The outcome of this assault against the U.S. labor force has been that workers' wages have decreased over the last ten years while the corrupt, tax-avoidance corporate biggies have seen their wealth factor swell by tenfold over the same period.

With the national debt soaring, federal deficits hemorrhaging red ink and balance of trade deficits at the highest level in U.S. history, the dollar worth only about 56-cents to the Euro, Bush has decided to put America's assets and treasures up for sale to the highest bidders. The Chinese now hold the lion's share of I.O.U.s in the form of U.S. government securities that Bush and his economic gurus have issued to foreigners to finance his failed war adventures in Iraq.

This arrangement will eventually collapse under the weight of the horrendous debt that Bush has amassed but as long as he can keep dumping money into the military-industrial complex for one more year he hopes to delay the calamity which is his sad legacy.

[leftLibertarian]

Fed Bails Out Wall Street - Again.

LOL - so much for a 'free market' economy!

[air2air]

I guess if you're basically a Socialist HuffPost reader you're not going to see anything good in a quarter point rate cut. And as we are seeing from the comments here, there's too much conspiracy fear of Capitalism to allow explanations to do any good for the posters here.

[vippy]

BIWEE - If I work hard all my life and I retire
I want to live like other people on this globe
without having to gear down though I know the way we are going we all will have to tighten our belts. Not the CEOs though, how can one possibly spend 150 million? USA always had a reputation of being able to get ahead but if one cannot do that than we need to learn it from other countries how to progress. All we know is how to make war and create misery!

[getoffmedz]

BFD

[NicoleAnonymous]

Sometimes I wonder if we would we would have done better if the Fed was never created.

It's run by men who clearly want to do what is best for Bankers until they leave and then they can make millions publishing a book where they criticize the administration although they didn't do it at the time and refuse to take responsibility for anything.

We should at least make the person running the Fed be elected by voters instead of appointed by the President.

[mrcontinental]

The FED may have been concentrating hard on inflation - but only on retail price inflation as measured by retail price indexes, which is concerned with shoes, food, holidays, consumer electronics, cars etc; a series of things which most of us like, but which don’t hold value. If we are trying to measure the tendency of money to fall in value this is only half the story because money buys more than retail goods, and two of the more important things it buys are (i) houses and (ii) unearned income for our retirement. For much of a productive life the cost of buying these two things exceeds half the average consumer's net income, yet both are left out of inflation figures based on retail prices.

Interest rates have an entirely disproportionate effect on the cost of living because there are a large number of variable rate mortgages and other commercial and retail loans, the costs of which rise and fall substantially with prevailing levels of interest rates. Rates can easily move from 3% to 6% for example. But this is not a 3% price rise, it is a 100% price rise on one of the most substantial parts of many monthly budgets. However just as rates rise, so they fall, over the long term. So it is extremely convenient for those who wish to report a low rate of inflation to include interest in the figures while rates are falling, and to exclude it when they are rising. And that is exactly what is happening here.

[biwee]

I retired at age 52, and learned to live on LESS!! I do have a mortgage, but no other debt. I drive a 6 year old inexpensive, fuel efficient truck....I will drive it another 4 years. Yet, I know people who drive $30,000-$50,000 vehicles who can not rub $100,000 in liquid assets together..­.weird! But, on to the FED, a private bank....th­e world is awash in dollars...­.trying to walk the tightrope between helping the economy (read as the sub prime packagers), and fighting inflation, including defending the dollar, is a fool's game.

[conservativeoriginalist]

"The Federal Reserve, confronted with surging oil prices and a slumping housing market, cut a key interest rate by a quarter-point on Wednesday"

The Fed will counteract the rising cost of our imports by further devaluing our currency via printing more money, making imports relatively more expensive. Brilliant.

"Ben Bernanke and his colleagues said that the central bank now judges that "the upside risks to inflation roughly balance the downside risks to growth.""

In other words, the Fed is pumping the market a little more to squeeze small time investors out of whatever they have left in their portfolios, then they'll dump their shares and leave the schmoes holding their dicks.

"On inflation, the central bank said the reading on core inflation, which excludes energy and food, had "improved modestly this year""

Go figure, omitting the two most pertinent inflating costs in our daily lives.

"The committee said that "some inflation risks remain," a signal that it will be hesitant to cut rates further because of concerns on inflation.­"

Currency devaluing resulting in higher cost of imports isn't inflation?

"the Fed's goal of a soft-landing in which growth slows and inflation is contained has been threatened by the most severe housing downturn in more than two decades."

I love the "soft-landing" term the bankers and investor analfysts throw around; to me, it indicates they KNOW a recession is impending, but don't quite want to acknowledge it aloud.

"Economists are worried that the credit crisis this summer will make home sales and prices fall even further, threatening consumer confidence and causing consumers to cut back on their spending."

THIS is why our economy will collapse - the American consumer has run their debt to record levels (personal debt grew 3 times faster than personal wealth, even with the real estate boom), and now are unable to borrow from Peter to pay Paul, and couple that with the banks' collective unwillingness to provide loans anymore, and we have a reason why foreclosures and bankruptcies are near post-Depression record levels.