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December 16, 2008

Fed Funds Rate Cut to Lowest Level Ever

The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank says it reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Federal Reserve Chairman Ben Bernanke and his colleagues also pledged to use "all available tools" as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. — CNBC

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Range? How much does my HELOC go down, .75% or 1%?

Posted by: dosteov at December 16, 2008 2:42 PM

Can someone who knows how mortgages work tell me when/if I should expect mortgage rates to react? I think I should be refinancing if the 30 year fixed falls under 5%, but I'd really rather not deal with any of this under after year end. I have that time, right?

Posted by: Ringo at December 16, 2008 2:43 PM

0 or 0.25 percent won't cut it, they'd have to do more or think of some other strategies. Dark days.

Posted by: cb6 at December 16, 2008 2:48 PM

I'm with Ringo and want to refinance as soon as rates go below 5% - will we see that and how soon?

Posted by: WTbound at December 16, 2008 2:50 PM

How is this already the longest recession in the last quarter-century when it's only a couple of months old?

Posted by: cwbuecheler at December 16, 2008 2:51 PM

cw...it officially began last December. The NERB came out a few weeks ago and they are the arbitrers (sp) of such things.

Anybody who can predict rates can get a job working for any firm on WallStreet and write their own paycheck

Posted by: daveinbedstuy at December 16, 2008 2:53 PM

The recession was officially DECLARED a couple months ago after it was confirmed that it had been going on well over a year.

Posted by: williamsburgguy at December 16, 2008 2:55 PM

Let me know when its -0.25%.

Posted by: dittoburg at December 16, 2008 2:57 PM

ditto...those kind of comments should be made in the "Open Thread." Shame.

Posted by: daveinbedstuy at December 16, 2008 3:06 PM

Cheese Louise. Are going to end up like Japan?

Posted by: Brooklyn Chicken at December 16, 2008 3:06 PM

2008 - 2018, America's Lost Decade. Sianara!

***Bid half off peak comps***

Posted by: Brownstones Half Off at December 16, 2008 3:08 PM

I hate to toot my own horn but I predicted this would happen months ago. I also wrote about the fed purchasing all type of assets especially the 10 yr. All this has come true and I feel this will help at one point. But I feel this all comes at a price. In the future when all countries come out of this the USA will lose its place at the top of the food chain. For now I look forward to a 4.5 30 yr fixed. To get that rate your going to have to have great credit though. Get ready to make alot of money....

Posted by: HOBOKENROCKS at December 16, 2008 3:12 PM

Cheeky

Posted by: dittoburg at December 16, 2008 3:16 PM

BROOKLYNHEIGHTSROCKS,

You predicted hyperinflation. How do you think that'll factor in? How do you buy your gold? Straight up (bullion, coins, etc.), goldmoney or perth?

***Bid half off peak comps***

Posted by: Brownstones Half Off at December 16, 2008 3:19 PM

Well.. There are no more bullets is the gun and the Zombies are still coming. If you think this means lower borrowing costs, I have some bad news for you. The policy adapted by the FED today means the Federal Reserve System is the only entirety providing liquidity to the Banking System. Everyone else is buying US T-Bill as a form of safety.

Release Date: December 16, 2008

For immediate release
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm

"Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further."

Allow me to parse this statement: We are cooked...

"Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters."

Implosion of the Mutant Asset Bubble! The hot money has left the building and we must provide "price support" to the "Masses of Asses.

"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. "

We are going full blast on the printing presses and we are going to ignore market conditions...

2009 is going to be real fun.. Eh..

The What

Someday this war is gonna end...

Posted by: Return of The What at December 16, 2008 3:21 PM

DIBS - ah, thanks. I see.

Posted by: cwbuecheler at December 16, 2008 3:26 PM

I bought us mint gold, i bought the etf gld and I am buying gold thru a friend who has family in india who deals in gold. I am now looking to start buying silver since it in my opinion is undervalued. Gold is getting hard to get so that means it should start really moving. I don't know in how much time but we will get it. Hyperinflation takes time but like the 70's it took 5-6 years after we got off the gold standard to truly start seeing huge price increases. I don't know how long but it will come if we see prices stabalize and start moving up.

Posted by: HOBOKENROCKS at December 16, 2008 3:29 PM

HOBOKENROCKS I would not blow my horn yet (or anyones else's for that matter). A new administration will take office on Jan 20, 2009 and there is one person in Obama's cabinet that going to take a AK 47 to the MAB. His name is Paul Volker.

Paul Volcker

http://en.wikipedia.org/wiki/Paul_Volcker

Paul Adolph Volcker (born September 5, 1927) is an American economist. He is best known as Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan (from August 1979 to August 1987). He is currently chairman-designate of the newly formed Economic Recovery Advisory Board under President-elect Barack Obama.[1]

First day in office he is going to Bitch-Slap Ben Bernanke in the face and tell him to get lost! Then he is going to take a missile to the rest of the Mutant Asset Bubble and RAISE THE FED LENDING RATE!!!!!! If you are long on metals, you are going to get hurt real bad! Take a look at the price of oil! 60% off the highs and what do you think is going to happen to the rest of the Asset classes. Wave Buh Bye...

The What

Someday this war is gonna end...

Posted by: Return of The What at December 16, 2008 3:29 PM

I predict that gold will retest 700 again soon. Keep your powder dry.

Posted by: daveinbedstuy at December 16, 2008 3:32 PM

volker has not been given the fed position and won't be given it. The truth is they have to do this and that is why I predicted it months ago. This is what they call a liquidity trap. The fed had to do it to save our financial system. I knew they would print and they are doing it. What , I also wrote they would buy the 10yr and now they have gone public as to doing so. Anyone who knows anything about what we are in would have known this. BTW I actually and truly purchased alot of euro's on sunday. Nice decision..

Posted by: HOBOKENROCKS at December 16, 2008 3:37 PM

Dave gold has broken its pattern of hitting 700 and bouncing. It went thru the resistance level and if it goes under 700 I would be selling my gld etf but not my physical gold. Though I doubt the retest of 700, but I have been wrong before.... This all depends on how all these moves work to help the market and economy.

Posted by: HOBOKENROCKS at December 16, 2008 3:40 PM

Word to the wise: If you are going to buy metals, you should only buy physical metals. Not ETF's or other "Holding" crap but the real thing.

Now look at this chart of Platinum. I had a argument with someone I know and told him it was overvalued! it was around 1800.00 an ounce and to him "No way". Well lookie here!

http://www.kitco.com/charts/liveplatinum.html

Look at the 1 year cart and look how violent the move downward was! Very very nasty! Be careful don't be a Madoff, LMMFAO!

The What

Someday this war is gonna end..

Posted by: Return of The What at December 16, 2008 3:45 PM

Word to the wise: If you are going to buy metals, you should only buy physical metals. Not ETF's or other "Holding" crap but the real thing.

Now look at this chart of Platinum. I had a argument with someone I know and told him it was overvalued! it was around 1800.00 an ounce and to him "No way". Well lookie here!

http://www.kitco.com/charts/liveplatinum.html

Look at the 1 year chart and look how violent the move downward was! Very very nasty! Be careful don't be a Madoff, LMMFAO!

The What

Someday this war is gonna end..

Posted by: Return of The What at December 16, 2008 3:46 PM

HOBOKENROCKS I hope that you was born in the early 60's and remember when Reagan took office. If not you are going to get hurt real bad and that's all I have to say about that...

The What

Someday this war is gonna end...

Posted by: Return of The What at December 16, 2008 3:49 PM

What the actual metal of gold is now hard to come by.And if you want to purchase it is going alot higher than the price of 800 an ounce. I have actual metals but they are getting really hard to get at a good price..

Posted by: HOBOKENROCKS at December 16, 2008 3:49 PM

Dave gold will go up depending on the market and economy. If the market comes out of this recession depression scenario and starts growing than gold goes up. If we stay in a low growth economy than gold probably stays in the 700-800 area.. Maybe even a bit lower...

Posted by: HOBOKENROCKS at December 16, 2008 3:52 PM

Here ya go!

Manfra Tordella & Brookes Inc of 90 Broad St NYC

http://www.mtbcoins.com/

Walk in with cash, walk out with Metal or Walk in with Metal, Walk out with cash.

Walk in Lodi with Metal, Walk out robbed..

The What

Someday this war is gonna end...

Posted by: Return of The What at December 16, 2008 3:55 PM

The way gold is trading now has ABSOLUTELY NOTHING TO DO WITH THE ECONOMY. The price of gold is being driven solely by the paper market. At some point there will be trouble with the GLD ETF because its assets are not audited.

The What is correct here. If you are holding gold LONG TERM, buy only physical gold. You can trade GLD but at some point there will be "trouble" in that thing.

Additioanlly, right now, it is a chart of lower highs and lower lows. BEWARE SHORT TERM.

Posted by: daveinbedstuy at December 16, 2008 3:58 PM

Dave that is wrong, the chart is no longer lower lows and lower highs. We just broke out of that chart. Actually we kept hitting the 700 mark and bouncing up. I would say that gld the etf is the actual thing promoting gold. The more people purchase the etf the more the actual gold has to be bought. Sure we don't know if they are keeping pace but we have to assume they are. Like I have written I use gld as a trading mechanism. Wait until they get a leveraged gold etf, gold will skyrocket and then fall like oil has. All these etf's have actually made these things very crazy. The movements are much faster than I have ever seen..

Posted by: HOBOKENROCKS at December 16, 2008 4:06 PM

My Bloomberg charts aren't wrong...IT IS A CHART OF LOWER HIGHS AND LOWER LOWS SINCE THE PEAK AT MARCH 18, 2008.

AS far as your assumption that GLD is purchasing the actual gold...you may not want to assume....

http://seekingalpha.com/article/110609-the-problem-with-gld-and-slv-etfs

Posted by: daveinbedstuy at December 16, 2008 4:14 PM

The gold market is significantly manipulated. From what I understand, the spot price of gold is inconsistent with what gold's actually worth. And I use the classic notion of "worth" as whatever someone will pay for it.

When the spot price was in the $700's, licensed dealers and jewelers were asking much higher.

And there's been a general silver bullion shortage, yet the price has gone down substantially these last 10-or so mos. Last I checked, prices rise as supplies drop.

If y'all really wanna get good financial news - REAL information, not MSM-filtered nonsense, go to
http://www.marketoracle.co.uk.

Hands-down best economic site I know. And it's a compendium, so it's not just the opinions of one "expert."

Posted by: Come Clean at December 16, 2008 6:28 PM

Peter Schiff and friends we got here...
He got it right - what went down.
He got it wrong - what went up (including gold).

Posted by: crimsonson at December 16, 2008 7:45 PM

it's easy as pie to buy gold coin and bullion, but you need cash sweetie, they will not let you put in on plastic.

Posted by: Inigo at December 16, 2008 9:51 PM

I am back, had to do some shopping for the baby. I am now ready to buy that brooklyn heights townhouse with 1000 ounces of gold. If the economy turns up I am sure gold will go up as well. Since it hit the lows of 700's it has kept bouncing off of that level. My charts say it has broken the lower highs and lower lows pattern. I will take my charts over any others in the industry. Matter of fact I know plenty of the bloomberg guys who do the programming at bloomberg and one has actually helped me with my charts... I have nailed almost every move in this market. Though I will be the first to say that all the technical patterns that helped me call this baby to a T have gone away. I am now investing blindly like most. But I have done great and am willing to take some losses but not alot of them. Therefor I am only in the market for the short term and in small amounts.

Posted by: HOBOKENROCKS at December 16, 2008 10:16 PM

And someone thinks this is going o stop the value of homes is going to stop going down. Wait until we hear about Americans firms and banks that lost money in his Ponzi Scheme, then you will see million dollar homes selling for pennies. Don;t you see we have been living in a false state of wealth. Homeowners face reality,

Posted by: hannible at December 16, 2008 11:59 PM

hannible the false wealth is the dollar, at least the home has intrinsic value, I would not pay the crazy amounts we are paying now but in 10 years with the printing press at full gear and with the world also printing we will get inflation and I will want to own things with intrinsic value.

Posted by: HOBOKENROCKS at December 17, 2008 1:03 AM

Knocking on Schiff, which is comical, means you called the stock market bottom and started buying there. Otherwise, Schiff's gold call has way, way out outperformed your paper assets, this year and seven preceding years.

Posted by: Whuh at December 17, 2008 9:52 AM

« Development Watch: 182A 26th Street Today on the Forum »

December 16, 2008

Fed Funds Rate Cut to Lowest Level Ever

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