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U.S. Stock-Index Futures Rally After Fed Cuts Discount Rate

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posted on Aug, 17 2007 @ 07:44 AM
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U.S. Stock-Index Futures Rally After Fed Cuts Discount Rate


www.bloomberg.com

Aug. 17 (Bloomberg) -- U.S. stock-index futures rallied after the Federal Reserve cut its discount lending rate to 5.75 percent from 6.25 percent to prevent credit market losses from slowing the economy.

``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward,'' the Federal Open Market Committee said in a statement following an unscheduled meeting. ``The downside risks have increased appreciably.''

(visit the link for the full news article)


Related News Links:
money.cnn.com
www.chicagotribune.com

Related AboveTopSecret.com Discussion Threads:
Stocks get pummeled
French Bank freezes US funds;Stocks Plunge on Rising Credit Anxiety



[edit on 2007/8/17 by JacKatMtn]




posted on Aug, 17 2007 @ 07:44 AM
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Is this a stopgap measure, or will this help stabilize the market which has seen turmoil in the recent weeks.



www.bloomberg.com
(visit the link for the full news article)



posted on Aug, 17 2007 @ 07:50 AM
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Originally posted by JacKatMtn


Is this a stopgap measure, or will this help stabilize the market which has seen turmoil in the recent weeks.



www.bloomberg.com
(visit the link for the full news article)


Depends if it stimulates the dow markets to buy, probably short boost. Euro markets, have risen 200 points, since the announcement.



posted on Aug, 17 2007 @ 07:59 AM
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I am no expert on this financial crisis, but to me it seems like band-aids on a bulletwound, all I know is from my vantage point, gas nearly $3 gallon and groceries rising due to producers passing the rise in transportation costs to the consumer ie. "milk $4 a gallon ",I am surprised that consumers are absorbing this hit.

How much longer until this economy collapses upon itself?

Like I said I am no expert, so could someone explain it in layman's terms?

How much trouble is in store for you and I?



posted on Aug, 17 2007 @ 08:37 AM
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the implication being....the Fed Funds Rate will also be cut by .50%
.... when they meet again.


the result being that all the ARMs (adjustable rate mortgages)
will decrease accordingly, being that ARM monthly payments are tied directly to the Fed Fund rate.
example, my son's townhouse payment increased by $300. per month
at the last rate increase...so when the Fed rate drops so will his payments,
back to where they were before. And it will take probably a year before
the Fed to increase the rate back to 6.25% and then another 6 months
before the ARM kicks in with a higher payment.


bottom line- - a lot of defaults and foreclosures will be averted because of the Fed lowering of its rate.
imho, they are dodging the bullet (for the present)



posted on Aug, 17 2007 @ 06:24 PM
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There has been a very, very large amount of liquidity injected into the banking system by the fed in recent weeks to stave the inevitable "burst housing bubble". Not only in the U.S. but Europe also. When this happens you have more inflation. And like it was mentioned above, when you see things like the price of milk going up at the grocery store, people have even less money to pay their mortgages with. More late payments means less money to lend, and the cycle repeats. We will see in the next 6-24 months:

1) The Dollar become worthless, or hyperinflation

2)minerals, metals, and oil will rise steadily

3)At some point after the collapse of the Dollar we will get the "Amero"

4)Mayhem in real estate as prices bottom out


So here is Downtown's investment advice...

You should have bailed completely out of the stock market by now, but it is not to late. Today the DOW closed over 13k.

Buy gold, not gold stock, actual gold coins that you can hold in your hand. Foreign currencies such as swiss franc's or euro's would be a good investment at this time.
I had some mutual funds and stocks, and I ejected from the market when it was over 14k. I do not plan on re-investing in anything paper for several years, if ever at all.

If you find that you bail out of the market and have a couple hundred grand sitting around, buy a place in the mountains with a cabin and spring water, and lots of guns, and maybe a horse or two and some livestock.

These next few years are going to resemble the great depression.




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