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Dec. 11 (Bloomberg) -- U.S. stocks tumbled the most in a month as investors speculated the Federal Reserve's quarter- point interest-rate cut will fail to prevent a recession.
Bank of America Corp. and Citigroup Inc. led all 93 companies in the S&P 500 Financials Index lower, and homebuilder shares fell the most ever, after the Fed said the housing slump is getting worse.
``It should have been more aggressive,'' said Quincy Krosby, who helps manage $330 billion as chief investment strategist at the Hartford in Hartford, Connecticut. ``The market's instinctive reaction is that it's too little too late and that the Fed is behind the curve.''
Don't be fooled by today's market. The Fed is running a BLUFF as they are out of aces. There is simply no possibility, way or means of being HAWKISH in the face of a meltdown wherein major financial entities of all kinds are simply going too broke to be rescued. These losses are the largest in my life of 66 years. This is the worst financial crisis in modern history and the degree of liquidity that has to injected into the world monetary system is without precedent. Soon the US FEDERAL BUDGET DEFICIT WILL EXPLODE UPWARDS, THE TIC WILL GO NET NEGATIVE AND THE DOLLAR WILL DROP LIKE AN F-22 IN A VERTICAL DIVE WITH AFTERBURNERS FLAMING.
Nothing is improving. Nothing is working out. Banks, institutions, insurance companies and internet financial companies are all calling for rescue, selling themselves to anyone with money to keep them afloat.
This is it!
Never before in your lives have there been such problems, yet many of you still sit on the sidelines not understanding or acting defensively.
This is it!
The plan to freeze rates on sub primes will never survive civil litigation. Bondholders do not care about the homeowner. Bondholders would prefer to liquidate the homeowner now rather than waiting five years, or even one day for that matter, and then maybe getting nothing back. When has finance had a heart for those in trouble?
This is it!
The markdowns you have seen cannot be to market as there is no market. There is much more to come.
Today’s Fed action in the great scheme of things is a non-event.
The Humpty Dumpty dollar has fallen off the Wall and all the King’s men can not put the Humpty Dumpty dollar together again.
Derivative Trades Soar to Record $681 Trillion in Third Quarter
By Hamish Risk in London, Bloomberg
Dec. 10, 2007
Dec. 10 (Bloomberg) -- Derivatives traded on exchanges surged 27 percent to a record $681 trillion in the third quarter, the biggest increase in three years, the Bank for International Settlements said.
Interest-rate futures, contracts designed to speculate on or hedge against moves in borrowing rates, led the increase with a 31 percent increase to $594 trillion during the three months ended Sept. 30, the Basel, Switzerland-based BIS said today in its quarterly review. The amounts are based on the notional amount underlying the contracts.
Trading surged as investors bet on losses linked to record U.S. mortgage foreclosures and policy changes by the Federal Reserve and the European Central Bank to offset the credit slump. The Fed cut its benchmark interest rate by half a point to 4.75 percent in September, the central bank's first reduction in four years.