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September 18, 2007

Open thread to talk about the Fed's move Gonna be an interesting day around the world

I'm in Housing-Crash-Central Las Vegas for a conference but should be able to keep up with the craziness. Wonder if CNBC will be on at the sportsbooks...

The most anticipated, and arguable most important Fed meeting in US history.

Bernanke shows his cards today.

Heroic Bubble Buster?
Hedge Fund Poodle?
REIC-Bailout Buddy?
Dollar Destroyer?
Moral Hazard Disbeliever?

Posted by blogger at 9/18/2007 
He will be no different in essence to his predecessors. Supporting the selfish interests of the US at the expense of the poor of this world. Sure rate cut of 50 bps to appease the Masters of Universal tyranny.

September 18, 2007 12:58 PM SPECTRE of Deflation said...

Today is the day when my Gold and Silver do extremely well. The FED will help, and how many times can we say the FED helps anything? :>)!!

September 18, 2007 1:12 PM 
250 to 500 bp drop in rates with bias towards further cuts if necessary. Possibly also announcing further injections of cash into the system if needed. They will not let this happen unfortunately...inflation will continue to increase at a rapid pace and the dollar will drop further.

September 18, 2007 1:15 PM 
I agree with you Keith, today is the day that sets the direction for the US (if not world) economy for the next five years. Like others, I hope he does the right thing and holds steady, but I'm guessing that he will cut 25 bps.

Get your popcorn ready.

September 18, 2007 1:26 PM 
Bernanke is about to punk the market while saving the dollar
 Dr Deflation said...

Hard to say, but I think that he has a bias towards a 'take away the punchbowl' kind of Fed. What's the evidence?

By now Greenspan would have cut. Bernanke hasn't. Greenspan freely commented on all sorts of matters in his hearings, Bernanke gives no advice. By all appearances he doesn't support bubbles or markets, but only economic fundamentals. Oh - what about that Helicopter speech?

The only evidence he's easy with credit is a speech he gave years ago, and a few comments here and there. I don't believe it. Speak softly and carry a big stick - he makes noises like he's a push over, but I don't think he wants to do it.

I suspect he'll cut rates at the last possible moment - which could be today, but I think he prefers in Oct. I think he correctly wants to end the bubble creating Greenspan legacy.

September 18, 2007 2:16 PM W.C. Varones said...

Me too! Pharma? Software?

September 18, 2007 2:27 PM 
I'm going to play contrarian on this and I may eat these words but I'm going to say he will stay put or, at an extreme, move the overnight rate up a quarter point (or stay put and put out a strong hint that a quarter point rate increase may come soon). Greenspan's interview on 60 Minutes was lame (no question from Stahl about his advocation of borrowers to go get an adjustable rate mortgage at the height of the idiot bubble) and obfuscated but he to me, he put out a thinly veiled message about the long term problem of more inflation, a thinly veiled message about the Bush Admin. politicizing the process moreso than other admin's (with exception of Bush the First), etc. Bernanke is one of Greenie's disciples and a student of the Great Depression and a past member of the Fed. For the sake of the value of the currency, let's at least hope he shows some balls in this fight. I would not want his job.

Smug Bastard

September 18, 2007 2:33 PM 
Have the FEDS ever done the exact opposite of what the markets were expecting?

Other than that, I hope BB keeps the rates as they are.

September 18, 2007 2:55 PM Batman said...

The cut is already in the prices guys, don't expect huge surprises. This clown will just go up there and read his script. When his manure spreader is out of ammo, he'll walk off the stage and pretend to do something useful elsewhere.

When you are this in debt, the interest rates are dictated to you by your loanshark - mark to market. He's just a cardboard cutout of an independent Fed chair.

September 18, 2007 2:57 PM 
Here is a short article discussing what I just posted a few minutes ago:


Again: it's not the talking head guys. The fucking horse is out of the barn, down the road and on the other side of the mountain.

September 18, 2007 3:03 PM 
Why is it that none of the online surveys offer the choice of raising rates?

September 18, 2007 3:15 PM 
He should stay put. It is what the future is cheering for!

September 18, 2007 3:29 PM bob_hope said...

My question:

What is the defined role of the Fed? (In other words, what should they do based on their raison d'etre?)

September 18, 2007 3:34 PM 
FYI on my "cab driver" test that I do in any city I visit, the cabbie last night said it's dead here in Vegas - more dead than he's seen it in years

He's been driving a cab here for 35 years.

He said it was because of the housing meltdown

I didn't say a word the whole time - just asked him how's business and he went on for 5 minutes about all the damn condos they built, all the speculators, and asked me if they were building all these homes what were the people who were supposed to live in them supposed to do for a living? He said there's a sea of foreclosures in Vegas, worst in the nation, and it's getting worse.

Checkmate. Vegas is screwed. Do rate drop is gonna get it back. Always listen to the cabbies - my favorite leading indicator.

September 18, 2007 3:49 PM cramer said...

OJ says all is well in vegas.He is investing in a condo project there too.

Blue balls ben will cut by 25 bp cause he is a b@tch for wall street.

September 18, 2007 4:10 PM 
50 cut. I am 100% sure.

September 18, 2007 4:13 PM 

The silver lining to all this is that it's a very good time to be bargain hunting. In the current economy, cash is king. As more institutions and individuals are forced to sell assets to raise cash, you may come across that one investment you've been waiting for.

For example, in 1987, the stock market crashed, real estate took a dive, and savings and loan institutions were wiped out. It took about five years for the economy to recover. During that period, the government formed the Resolution Trust Corporation (RTC). The RTC took some of the best real estate in the world and sold it for pennies on the dollar.

Thanks to the RTC, in five short years Kim and I went from struggling financially to becoming financially free. It was a five-year short squeeze on cash that made us rich. I sincerely hope you can profit from the next short squeeze the way we did then, rather than being among those who get squeezed.


September 18, 2007 4:16 PM 

If you wanna have some fun while in my fair town, head over to Scores. Tell the gorilla at the door "Big Buddha" sent you. They'll take care of you real well.

September 18, 2007 4:17 PM Veronica Lodge said...

RE: Bernanke's choices:

A. Slash interest rates, thus creating a global run on the dollar and runaway inflation.

B. Raise interest rates and watch banks fail as millions of cash-strapped, unemployed borrowers default.

A or B?



I know! He can do nothing and let both scenarios A and B occur at a slower pace.

That's the way to go.

He can fiddle as Rome burns.

 
ben cuts 25 basis points. dow tanks cuz "they" are pissed that he did not cut 50.

September 18, 2007 4:20 PM 
I predict that no matter what amount the cut and/or the level of positive bias indicated in the fed statement in regard to future cuts there will be a "Return of the Trolls" to HP, a.k.a. "Night of the Living Dead". But this time instead of having to shot them in the head to kill them again, it will be the sinking realization as events unfold that any and all the collective efforts by the central banks and governments of the world will be impotent in the fact of the market forces their collective policies put in place 5+ years ago. The immediate manifestation of such will be the Earthquake of mortgage foreclosures that are coming over the next two years due to unaffordable toxic loan resets and then the Tsunami that propogates from this and ripples through the world economy. The 07 sub-prime meltdown was just the prelude. Good Luck!

September 18, 2007 4:31 PM 
No cut to funds rate, .50 cut to discount window, market freaks

September 18, 2007 4:33 PM main stream media said...

1/2 point is what the markets want. Anything less and we'll see a big sell off. Asia will not let the USD tank, and the central banks have already cooked up a deal to support the dollar even with the lower rates needed to save the credit industry and housing markets.

The charade will continue a while longer. Next quarter is bonus time for the Wall Street types, and '08 is an election year here and Beijing has the Olympics. No turds allowed in the punch bowl!

September 18, 2007 4:39 PM Joe Logic said...

Keith - I was in Vegas a couple weeks ago and yes the mood was very somber. A complete 180 from the days of 2005 when all I heard were things like: "Yeah we just bought in a Aliante, we gonna hold for a year while it goes up $250k in value, then flip." Now it's "man, my cousin just got foreclosed, he's looking for a place to rent".

Oh and stay close to the strip. Avoid contact with locals as much as possible. They're angry and desperate and crime is everywhere. Not joking here. With all the for sale signs and foreclosure notices, gangbangers are tagging them to mark their turf.

September 18, 2007 5:07 PM DCfred said...

No matter how much the Fed cuts it will do little to stop the foreclosure train wreck. The most problem people have is that they are unable to refinance due to having no equity in their home. And the trend is for homes to continue to decline in value. I think people have unrealistic expectations as to the results of the Fed dropping rates.

September 18, 2007 5:23 PM 
joe logic you are trip dude. You are like the other baffoons who go to LV for 3 days and think you know all there is to know about a city.

Anyone who bought anything in Aliante was a fool in 2005 or 2006. It's in N. Las Vegas, ie the Compton of Las Vegas.

Reality is most people who live there, bought a house to live in. It was the out of state (read California) investor tools who bought 5 homes hoping to flip each for $150K profit. They are fucked and hard. They are also the ones who did most of the buying in 2005 at the very peak and are now the vast majority of those foreclosing.

The locals are going about their business as usual, making money of idiot tourists like you.

September 18, 2007 5:24 PM FlyingMonkeyWarrior said...

This is a good one. Could not resist sharing this Fed Bank Comic Strip from ITulip.com.


September 18, 2007 5:27 PM 
Vegas? Bring back the "Rat Pack", now those were the days.

September 18, 2007 5:40 PM 
I don't care what Kudlow and Cramer want . Raise the rate .25% and get it over with Ben.

September 18, 2007 6:05 PM smitty said...

"By now Greenspan would have cut."

does anyone think that Greenspan, with his comments about Bush being a financial dummy, think that he's setting up the opportunity for ben to stay put or raise rates? i.e. Greenspan's book will provide the rational for keeping rates where they are...?

September 18, 2007 6:28 PM 
Ben has no balls

he cut 500 points

bye bye dollar!

September 18, 2007 7:19 PM 
HALF point!

September 18, 2007 7:20 PM 
hello, inflation
 

50 cut

DOW soars

Better luck next time.

September 18, 2007 7:21 PM 
lowered by half a point!

We are so screwed.

September 18, 2007 7:22 PM 
Ben and the Fed chose hyperinflation over classical medicine, this will just make things worse in the long run. You think oil is expensive now at 80? Wait til next summer.

September 18, 2007 7:24 PM 
They just bailed out Wall Street. Kiss the Dollar goodbye. It's over.
 
Those of us foolish enough to live conservatively and save have just been thrown under the bus. 50 basis point drop in both the federal funds rate and the discount rate. Wow, just Wow.

September 18, 2007 7:25 PM borkafatty said...

Fed slashed 50 points....good by dollar

September 18, 2007 7:26 PM 

Here comes $4 gas and higher Walmart prices (imports are gonna get expensive!)

Don't think this is gonna do squat for housing. people can't afford these homes with traditional lending products.

Negam, nodoc, Jumbo craziness ain't coming back.

if anything I think this will precipitate the downturn.

Does anyone else smell a flight from the dollar? i think Treasury yields will have to increase significantly...

September 18, 2007 7:27 PM 
Fascinating. I jumped 100 points, and is now just kinda hoverin. Bet it dosent do too much more today, goes up tomorrow morning, and then starts tanking by thursday-friday.

September 18, 2007 7:32 PM LauraVella said...

Good Grief! Ben rolled over and reduced the rates!

The icing on the cake would be Fanny Mae and Freddy Mac increasing jumbo loan maxes to 600K...

Housing is toast anyway, but will this happen???

September 18, 2007 7:48 PM 
James said:"Bet it dosent do too much more today, goes up tomorrow morning, and then starts tanking by thursday-friday".

Agree, and October will be even worse.

What will the FEDS do then? Drop the rates again and 50pts?

Good God, we are so screwed.

September 18, 2007 7:56 PM 
Smug Bastard eats words.


September 18, 2007 8:14 PM devestment said...

aint that the truth!

September 18, 2007 8:24 PM 
Believe me I know more about Vegas than you do, so you're not fooling me. Aliante is just another cookie cutter summerlin wannabe that all the locals love to brag about living in. They think they made it because they put a super Walmart and a asscrack-smelling locals' casinos nearby. Compton of Las Vegas... LOL. The whole city is a Compton.

But you are right about locals buying to live and out of state investors. Most of those investors got out by 2005 and dumped their overpriced houses on dumb and unsophisticated locals who got teaser rate ARMs. There were plenty of suckers in LV to go around.

September 18, 2007 8:26 PM 



DOW up 300 and still climbing.

Sucks to be you right now renter/cd owner.

September 18, 2007 8:48 PM 
oil traded in euro's

hmmm, what is that going to entail?

housing price decline won't stop (not very many more qualified buyers and willing lenders - greed has met fear) and for the moment, J6P in South Sucatash, OH pays $20 less per month in interest on his variable rate home equity loan, meanwhile his fuel costs go up 20%

mmm, mmm, good.

Ben had a chance to keep the currency worth something but chose not to along with the rest of the Fed Heads. Wow. Stock ponzi scheme gains enough momentum for a sly few to quietly make their way to the exit ramp.

September 18, 2007 10:18 PM Sheeple said...

I am a sheeple. I care not that I am a worker in a debit slavery society. I care not that any savings I may put aside will be eaten by the bankers inflation. I care not that any money I invest with the herd will be lost to a bubble. Oh yes, I am a sheeple. I have money in stocks so I am happy today; I have gold so I am happy today. I think I am getting rich but I am really loosing to inflation. Central bankers are the puppets of administrations. This is obvious. What will the next administration bring? By the looks of the multiple losers that are running I bet an even bigger sheep trim is in order.

September 18, 2007 10:58 PM 

September 18, 2007 11:01 PM oneclickplus said...

Son of a b!tch. He should have RAISED rates. Damn

September 19, 2007 4:53 AM 

I think the House is making rumblings about OKaying increases of up to 800k in some areas of the country!

September 19, 2007 8:04 AM HP blogs & websites NEW! HousingPANIC via e-mail