What will the Fed do today?

Question

Do you think they will drop the rate a quarter point, a half point or do nothing but reduce the discount rate? Personally, I think there will be a quarter point drop, but am rooting for a half point drop.

Fish Naked · Answer

Do you think they will drop the rate a quarter point, a half point or do nothing but reduce the discount rate? Personally, I think there will be a quarter point drop, but am rooting for a half point drop.

KOAJ · Answer

i dont think they should do anythingthe cut in the discount rate already re-liquified the credit markets...a cut in the fed funds rate will appease the market. it is NOT needed for the sake of the economy

Vermeer · Answer

I agree with the should point above, however I think what will happen is 25 fed funds, 50 discount.

Fish Naked · Answer

WOW! a half and half

KOAJ · Answer

50 bp cutMarket Bernake

Gunners · Answer

"hold on to your butts!" as samuel L. said in Jurassic Park.&#xD;&#xA;i wonder how many bears just started crying

KOAJ · Answer

gunners50bps means the Fed is scared

Vermeer · Answer

I think this is actually a rather alarming case for bulls, not bears, in the intermediate term. It means they think things are much worse than they previously have indicated.But it will give a pop to the short term no question.

Gunners · Answer

this coupled with LEH good numbers, and probably the rest of the brokers being fine is pretty bullish for the stock market it seems&#xD;&#xA; &#xD;&#xA;i could be, and probably am wrong though

wallstreetcappers · Answer

Market loves it..man they ramped it up hard.

Amazing, right at 2:15 my computer slowed to a halt, sites like yahoo finance and Scottrade were running very slow.

I couldnt get to the story for 5 min after the report.

KOAJ · Answer

The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4-3/4 percent.

Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally.

Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Developments in financial markets since the Committee's last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

commenting on the bold:

this is ridiculous: for the Fed to think that a rate cut is all thats needed to save the housing mkt is a joke.

commercial paper and 13 wk tbills are different but the housing mkt is done because the buyers who pushed this mkt up are gone

companies will be able to borrow easier, but the home buyer and Joe Public will continue to have a tougher time

Fish Naked · Answer

My Scottrade window went off like a Christmas tree at 2:15.

KOAJ · Answer

fishyahoo finance, cbs mktwatch and bloomberg.com all went down at 2:15 for me also

Fish Naked · Answer

KOAJ, one of my buddies does evictions and lock change outs for the banks on their foreclosures. He is steadily getting busier and busier. In South Florida, nothing is selling and prices are dropping like rocks. Here the taxes and windstorm insurance contributed to the housing problem. It&#x27;s gonna take a lot more than this to fix the housing issues here.

Superfigg · Answer

this is  going to get ugly for the longs soon

Gridophiles · Answer

[Quote: Originally Posted by KOAJ] fishyahoo finance, cbs mktwatch and bloomberg.com all went down at 2:15 for me also&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA; &#xD;&#xA;E*Trade too.

july4433 · Answer

Three cheers for Ben!!! IMHO, Rate cuts are not a cure all, but it is the right thing. Now if Bush Jr. ever wakes up and gets the vast majority of occupying ground forces out of Iraq and quits sapping hundreds of billions of dollars from the USA economy , our federal deficits will begin to subside, the dollar will begin to strengthen, and mild inflationary pressures like oil will begin to subside. If only there was a win/win solution for record trade deficits, all would be well. Throughout history, those who have the highest manufacturing output, enjoy the highest standard of living for their citizens.

scools12 · Answer

long with LEH this morning &#xD;&#xA;I couldn&#x27;t be happier for the short-term

wallstreetcappers · Answer

Here is a little comment, but an obvious one.

This 50 pt cut actually DOES help the home owner, especially those with ARMs tied to PRIME or somthing other than the LIBOR. I dont know how the LIBOR slides with fed funds, I know there isnt a direct correlation..but even if it doesnt, this easing should lower high quality loan rates and those with the high ARMS could more easily convert into a fixed rate mortgage which COULD help..it isnt a cure-all but it is better for some.

Also, money market rates are going to drop..which sucks...

Lippsman · Answer

I have a 5/1 arm on one of my places that just may be converted now.

wallstreetcappers · Answer

Lippsman,I am shocked..a smart businessman takes a 5/1 ARM?Actually I considered one a few yrs ago but bit the bullet and took a 1/8 higher rate for a fixed 30 yr.

Lippsman · Answer

[Quote: Originally Posted by wallstreetcappers] Lippsman,I am shocked..a smart businessman takes a 5/1 ARM?Actually I considered one a few yrs ago but bit the bullet and took a 1/8 higher rate for a fixed 30 yr.&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA;I was going to pump and dump this last property. I wanted to hold onto the first 5 properties for a long time, but make some fast cash on the last one. So I didn&#x27;t wan&#x27;t to lock it up long and got a lower interest rate. The property did exactly what I thought it would.  It doubled in price after 3 years.&#xD;&#xA;But they announced and started building a huge lifestyle center, within a 5 minute walk from all of my properties.  (Click here).  So now I&#x27;ve decided to hold out for more profit.  Also, the real estate market has a backlog of properties for about 18 months.  &#xD;&#xA;If I can get under 6%, I&#x27;m going to do it. It would be nice though to sell it and wipe out all of the business debt. I have no personal debt, so that&#x27;s a huge bounus. Plus have a nice chunk to throw at another investmemt.  But I&#x27;ll be damned if I&#x27;m going to pay captial gains taxes at this point. And when I think about it, my business debt interest rates are so low for the next 10 months you would anyway.

wallstreetcappers · Answer

No personal debt of ANY kind, house included???

Lippsman · Answer

[Quote: Originally Posted by wallstreetcappers] No personal debt of ANY kind, house included???&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA;Nada, zilch, zero, zip...........if you don&#x27;t have cash you shouldn&#x27;t buy it........Now who said I owned my house?  I rent it from Sunset Realestate.

Vermeer · Answer

Anyone ever read a fascinating book entitled The Black Swan:The Impact of the Highly Improbable by Taleb? Thought provoking to say the least...and funny.

What will the Fed do today?

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