[jdumars]

Link...

$this->bbcode_second_pass_quote('', 'I')n a statement, the Fed said that it took the move on loans made directly from any Federal Reserve bank to "promote the restoration of orderly conditions in financial markets."

In another statement, the central bank indicated that "financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward."

The Fed added that "although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably" and that the Fed was prepared to take more action if necessary.

[Bas]

ah good news, was just busy trying to find a "bargain" on the markets. Better have an order in place before the opening.

[seahorse]

First, everyone always predicted "helicopter Ben" would inflate out of a mess, not deflate, and really, who wouldn't.

Second, will this save the US economy? No. The US economy is in trouble for a myriad of reasons, but let's look at the housing bubble. This one minor adjustment will not remove all the glut of housing off of the market and will not save all those dumbasses with ARMs getting ready to reset in October. So, at best, this is a temporary reprieve for the markets, for the Jim Cramers and other talking heads. Its not different than the central banks all pumping a bunch of money into the system last week.

[dinopello]

Whee! Free money !

Money may not grow on trees,
But it does on Bernakee's ...

Mo money, mo money, MO MONEY !

It's always nice to see my portfolio pop up like that.

Here's the washington Post article

$this->bbcode_second_pass_quote('', 'I')n a press release, the central bank said the decision was in direct response to events that have caused the Dow Jones Industrial Average to shed nearly ten percent of its value in a week and forced markets sharply lower in Asia and Europe as well.

[drgoodword]

A very negative development. While the markets will do well today and perhaps next week, this is a signal of desperation from the Fed.

The wonder of it all is that the worst fallout from the housing crash hasn't even yet hit. While $500 billion in ARMs are scheduled to reset in 2007, $700 billion in ARMs are scheduled to reset in 2008. Foreclosures over the next 24 months will dwarf the already substantial current number.

And the other shoe--a severe downturn in consumer spending--hasn't yet hit the ground (although it's falling). If the Fed thinks the current panic is bad, wait till the ugly recessionary see-saw contraction of diminished consumer spending and mass business layoffs kick in.

The Fed is chambering the silver bullets too early. But then, given how massive the fundamental problems are...maybe every action is already too late.

[jboogy]

The FED opened the discount window this morning. DOW futures went from negative 250 to positive 250 (approx.) immediately.All the banks and hedge funds with liquidity problems can now take their worthless mortgage paper to the fed and get loans on it.These loans are supposed to be paid back. If they are not and the lendee defaults then we the taxpayer are on the hook .Putting on another bandaid and ignoring the hemorrhage underneath just makes it harder to heal the underlying injury, and the patient loses more blood in the process.

[evilgenius]

Notice that this is not a lowering of the Fed Funds rate. This is a lowering of what big capital pays to borrow. This is how big capital rearranges for certain companies (the ones they have gotten out of) to go bankrupt. Little people and big funds depended upon by little people are going to get left holding this bag. Big capital is protecting itself in a way that you and I can't, with ultra cheaply borrowed money.

Has big capital proven that it deserves, by the rules, to borrow that money so cheaply? What is big capital spending that money on? Follow the money, it is the secret of almost any big caper.

[Roccland]

$this->bbcode_second_pass_quote('', 'T')he Fed is chambering the silver bullets too early. But then, given how massive the fundamental problems are...maybe every action is already too late.

[OilIsMastery]

The Fed isn't in a pickle at all. After 21 consecutive down days there is obviously no more risk of inflation. Therefore they can cut rates with impunity.

[jboogy]

Sorry , didn't check to see if someone had posted before I started my thread, can mods merge" crash averted "with this thread?

[evilgenius]

I believe they plan on inflating eventually, but they will have to deal with the euro-bourse crowd first. First they strengthen the dollar. Then they place Iraq in more capable hands so that they insure themselves of a dollar only swing production status (well pseudo status). Then or at the same time they further ingratiate the Chinese by inviting them to purchase a large percentage of US real estate cheaply. Then they hyperinflate and make the rest of the now euro-bourse free world pay for it.

[Iaato]

Cheap money for the in crowd, come and get it. And you can pawn anything you own:

"Pledging Collateral

All Discount Window advances must be secured by collateral acceptable to the Reserve Bank.

What types of assets can I pledge to the Discount Window?

The following types of assets are most commonly pledged to secure discount window advances:

Obligations of the United States Treasury
Obligations of U.S. government agencies and government sponsored enterprises
Obligations of states or political subdivisions of the U.S.
Collateralized mortgage obligations
Asset-backed securities
Corporate bonds
Money market instruments
Residential real estate loans
Commercial, industrial, or agricultural loans
Commercial real estate loans
Consumer loans
Check with your local Reserve Bank if you have questions about other types of collateral"

Let's throw everything we've got in the boiler to keep this party going
(I got this from Prudent Bear Chat-Rasputin)

Can I pawn my sofa? Inflate away, yes. Yes, we're desperate. Another note over at PBC from a broker suggests that Prime is going to be a bigger debacle than subprime, because of all the liar loans.

[mmasters]

Yeah it's a move of desperation that wont last long. Probably a good day to sell out to the sidelines.

[Zardoz]

Business, rotten to the core, as usual. What a sick, sad, pitiful game:

The escape of the enablers - When Wall Street fails, it inevitably asks for a handout

$this->bbcode_second_pass_quote('', 'W')all Street loves to talk about letting financial markets weed out the weak. But when the Street itself gets in trouble, it sticks out its little tin cup, asking for help. And gets it.

The subprime-mortgage-market meltdown is a classic example of the way small fry get devoured, but the whales of Wall Street get rescued. Here's the deal: People with crummy credit who took out mortgages are being allowed to fail in record numbers. The mortgage companies that made those loans are being allowed to fail.

The Street itself? It's bailout city. Even before the Fed made a symbolic half-point cut in the discount rate, it and other central banks from Switzerland to Singapore were trying to rescue the Street by injecting hundreds of billions of dollars into the financial markets and announcing they will put up more, if needed...

...It's the "too big to fail" syndrome. In a world in which big players make incredibly large and complex deals with one another - that's what derivatives are - regulators don't dare let a big or important institution fail for fear that the collapse of one would lead to "cascading failures," and other institutions wouldn't be able to collect what the collapsed institution owed them.

The Fed's job, you see, isn't to protect you and me and our retirement portfolios, or even many of the nation's largest companies and biggest employers. The Fed's job is to protect the financial system. That's why it's trying to rescue the gigantic subprime enablers while letting borrowers and mortgage companies go under.

[burtonridr]

I doubt it has been averted, I know of atleast 3 doom scenarios that are supposed to put is into a decline around the year 2010. Any of the three really have the potential to do it. A combination of the three could have amazing consequences. First is of course peak oil. Second the housing slump. The third is a theory talked about in the book "the prophecy" out of the rich dad, poor dad series. The theory that because of invention of the 401k a lot of us are screwed and it will cause the stock market to crash. In the event any of these occur I will just adapt and find new ways to make money. The key is the ability to adapt to new situations, living and keeping a positive attitude can get you through anything.

[Iaato]

This is an impressive graph. Looks like time to go buy more gold.

to the moon, Alice

And a wheelbarrow....

[jboogy]

Evil G , where do you come up with this stuff?I'm as willing as the next guy to prematurely assign nefarious motives to everything TPTB do , but your hypothesis have no readily discernable logic behind them. It has to make sense to somebody , either the evil conspirators or we who mistrust them.
"first they strengthen the dollar"-you haven't been paying attention
"....Iraq in more capable hands"-Iraq is over, not gonna happen
"dollar only swing production status"-been there,trend is away from that and is accelerating
"invite chinee to purchase real estate"-no invitation necessary
"hyperinflate and make europe pay"-hyperinflation and everybody dumps their dollars,it's happening already

[evilgenius]

I wouldn't buy any more gold than you can afford. Keep it to a percentage. As the dollar strengthens in this crisis you will see gold suffer. Wait.

Two weeks and maybe we will see a really big player go down. That will be the first insurance casualty for the big fish. By then they will be on to the next disaster, pumping it up for the little people to follow.

BTW, I think this will eventually play out like 9/11, into a whole new worldview for Joe average. A worldview that allows the Bush elitests to do as they please saying that it is in the best interests of the people. The people will believe. Oh, will they believe.

[jboogy]

Perhaps I should have titled it "crash temporarily averted"?I don't think we'll have to wait till 2010 for a "decline",I would say we've been in decline since ohhhh...I don't know...maybe since we went off the gold standard?I'm fully expecting complete economic crash ,maybe global, within 3 years,maybe a LOT sooner!But then again who knows?