Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Fed Takes Page from Greenspan Playbook

By

Historic slash-and-burn for interest rates.

PrintPRINT
Foreign investors currently favor short-term US investment products - which I think underscores the anxiety everyone feels right now, rather than any lack of confidence in the US in particular. Nevertheless, it's a disturbing trend.



Biggest Ticket Item

Given that there has been no change in terms of sales condition for new homes over the past month, the chief economist of the National Association of Homebuilders David Crowe said "it will take definitive government action to stop the slide in home values and turn consumer sentiment."



The Fed makes its move today, and Fed funds futures are pricing in a 64% chance for a 75-basis-point cut to 0.25% and a 36% chance for a 50-basis-point move to 0.50%. The effective rate, of course, for Wall Street veterans is hovering right above 0% (it will be 0.15 or lower today). I don't think it's a big deal on Main Street, either. Weirdly, the playbook is straight Greenspan - you know, the one currently being blamed for causing the subprime bubble.

Greenspan, for all the heat he's been taking, performed heroically after Black Monday - when Hong Kong was down 45.8%, Australia 41.8%, Spain 31.0%, the UK 26.0% - and the DJIA was thumped to the tune of 22.7%. Yes, in hindsight, he kept rates too low for too long - but that doesn't mean they should never have been so low at all. With that in mind, I'm welcoming the low rates - although the immediate impact won't look anything like it did in 1987.

No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE