Pressure Mounts For Fed To Make Big Rate Cut

CNN/Money:

With unemployment rising to 5 percent in December and jobs growth coming in well below forecasts, economists said the Federal Reserve may be forced to slash interest rates when it meets later this month in order to stave off a recession.

In another step to combat the slowing economy, the Fed also announced Friday that it was going to lend up to $60 billion more to banks in two auctions later this month and that it would decide by Feb. 1 if it will conduct more auctions. The auctions are part of a plan the Fed announced in December to to try and restore order to the distressed financial markets.

But worries about a recession trumped the Fed's willingness to lend more money on Wall Street Friday. The Dow plummeted nearly 260 points, or 2 percent. The S&P 500 finished the day about 2.5 percent lower while the Nasdaq plunged 3.8 percent.

Read the whole story: CNN/Money

Comments

[MadAppraiser]

There is great irony in the placing order of the “Subprime Is The Word Of The Year” and “Pressure Mounts For The Fed To Make Big Rate Cuts” photos/captions in the Business News and Opinion Quick Read Section.

[Galvestonians for Dr. Ron Paul]

Ron Paul spanks then schools Bernanke.

http://www.youtube.com/watch?v=sVCStbbIvDg&feature=related

http://www.youtube.com/watch?v=_8pLpI5rzKI&feature=related

[geobushono]

bleed it dry and slaughter it......we understand

[thepainter57]

Globalization should be a dirty word to all Americans.

This country and it's administrations since the Nixon era have been on a course to free markets and privatize the government.

What this is doing is creating a class of super-rich - who will be able to pay for all their needs.

This government supports CORPORATTISM and CAPITALISM.

This government no longer supports it's middleclass and is in fact trying to annihilate it.

[themodernleader]

dharmamom: People who are always contending that the dark ages are reemerging or that the world is ending is subject to serious question. I agree with you on that point.
My argument is that an era is ending cathastrophicly as we enter into insolvence as a Nation. Our debt,internal and external, is so overwhelming that it may be unpayable in theory; our industrial, technological base has been so devastated these past 26 years that we are in danger of losing our authority to control our own national destiny.
The country will still exist; the people will still toil, or do nothing, or struggle for survival; citizens shall continue to be born, live, reproduce and die. What will be different will be the character, perfomance and competence of the people. Americans will no longer be the shining example for excellence and contribution. Americans will no longer have the capability or wisdom to decide for themselves and create their own future and destiny.
Until we return to fundamental economic principles in managing our affairs, we are inviting others of alien agendas to manage them for us. The hour is late for deciding to unify and address our problems directly with sacrifice, courage and honor.

[ajax2]

Start those money presses rolling.

[mmckinl]

The only solution is a Public Central Bank operated with 'greenbacks'.

Currently we have a privately owned and operated Federal Reserve that first and foremost promotes the interests of its shareholders, Banks and their affiliated Brokerages, Hedge Funds, Insurance Arms and Investment Banks before the good of the economy or the people.

The privately owned and operated Fed uses debt money - money magically created from the debt on its books, to loan to member banks, at interest, by a ratio of $10 of creation for every $ 1 of deposit. This creates a situation that causes speculation and inflation on the upswing of the business cycle and deflation and bankruptcy on the downswing of the business cycle.

Using 'greenbacks' and a Public Central Bank, the method described in the Constitution, the money would be that of the people of the United States, not of the private Federal Reserve. In this way money can be managed for the good of the economy and the people, not for the profit of the banking industry.

Just 25 years ago profits for the financiaal industry were 6% of the S&P 500. Now they are over 30%. The question must be asked: Do we run the economy for financial institutions, or do we run the economy for the production of real goods and real services. We have become an economy of paper traders and financial 'products'.

He who controls the money, controls our destiny.

[VivaZapata]

After Wilson handed over the monetary system to the banks (the Federal Reserve), he was quoted as saying something to the effect of "What have I done?" Now we know: he sold out the whole country. Twice. He also entangled the US in World War I, the ramifications of which we are still feeling. Ironic that Woody Guthrie was named after him. War and the Federal Reserve: sound familiar?

[DisgustedTexan]

The Fed doesn't have a dime. The only money they have is the stuff they print. Their decision means 60 billion dollars of new money will come into the economy. It helps their greedy banker friends but exacerbates inflation.

Secondly, how about us savers? Many on fixed incomes survise on the interest they get on their small savings. The Fed increases inflation and reduces income to savers.

Thirdly, The Fed can be compared to a hidden stair way. They can pull the economy down but when they push back on the rope to stimulate the economy nothing happens. The rope goes limp. So will this rope go limp.

[lovesanimals]

I read thru every comment on this topic, something I rarely do. People don't get your panties in a wad- The crash of the fake dollar is really a good thing. It will mean the system JFK tried to start back before he was terminated was to have a gold and silver backed currency. I know most of you won't believe it but the middle class will survive this because our debt will be forgiven. The "good" people in the shadows are working to stop the theiving Bush Cabal.

[lovesanimals]

people need to realize we are at the cliff! henry Paulson was killed over X-Mas break-it is in all the overseas papers, or it was!People have been reporting in this country their atm withdrawls are being limited.It is wise to google NESARA, this will be the new banking system put in place once our Fed bottoms out. The little guy will prevail in the end..

[themodernleader]

I am instructed that the financial rating of the four major muncipal and other bond insurers will be downgraded soon. Why? They insured AAA rated mortgage based bonds that had been fraudently assessed by our criminal paper shufflers.
The down grading of these guarantors will cause the down grading of all or our bonds. Credit will dry up as defaults burgeon. Such a catastrophe appears inevitable; Such a disaster will make our bereft citizentry again believers in earning, spending and saving and borrowing wisely. It will be a costly relearning,

[jmsent]

Why do they keep doing this? It is a vicious cycle of lowering interest rates, which lowers exchange rates, which raises oil prices, which slows the economy. And on it goes. This is nothing more than a backdoor tax on the American people. And when it doesn't work, they'll lower taxes, which will raise debt, which will lower the value of the dollar, which will raise the price of oil...you get the picture.

[cognate]

Kiss the dollar good-bye.

[yappnmutt]

just like 1929, the excesses of wall street will bring main street to its knees. bernanke is between a rock and a hard place as shrubonomics receives the bill for the irresponsibilty of both its economic and political policies that have, in effect, looted the treasury and the middle class. this is not going to be a run of the mill recession.