Labels: Dow Jones, economic collapse, economy, Federal Reserve System, Henry Paulson, stock market crash, Wall Street
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posted by profmarcus at
1/22/2008
"The economy is still staring recession in the face, but at least the Fed now gets it," [said Ian Shepherdson, chief U.S. economist with the High Frequency Economics consulting firm].
Labels: Dow Jones, economic collapse, economy, Federal Reserve System, Henry Paulson, stock market crash, Wall Street
Submit To Propellerposted by profmarcus at
1/22/2008
One analyst said the Fed was "obviously panicked" by the threat of recession.
"Unfortunately they have no power to reverse what in my opinion is the worst post-war recession," said Michael Metz, chief investment strategist at Oppenheimer in New York.
'This is huge'
The Fed's interest move came as a complete surprise, as it was taken outside its timetabled rate-setting Open Market Committee meetings.
The last two such surprise cuts were on 17 September 2001, shortly after the attacks of 11 September, and on 3 January 2001, in the wake of the dotcom bust.
The last time the Fed cut rates as much as three-quarters of a percentage point was in August 1982, almost 26 years ago.
Labels: Dow Jones, economic collapse, economy, Federal Reserve System, Henry Paulson, stock market crash, Wall Street
Submit To Propellerposted by profmarcus at
1/22/2008
U.S. stock futures seesawed Tuesday after the Federal Reserve, responding to a growing financial market crisis, slashed interest rates 0.75 percentage point.
Dow Jones industrial futures, down more than 500 points, or more than 5 percent, before the Fed move, were fluctuating violently an hour before the start of trading, but improved to a level where they were down 206, or 1.70 percent, to 11,900.
The Fed move was unsurprising, given that world stock markets were falling precipitously the past two days, and that U.S. stocks had tumbled last week amid growing fears of a recession in the United States. Still, the markets are still quite anxious, not sure that even interest rate cuts will lift an economy slammed by an ongoing housing and credit crisis.
The Fed's move came a week before the central bank's regularly scheduled meeting, a sign that the Fed recognized the seriousness of the world financial situation.
The Fed's decision to slash the federal funds rate — the interest that banks charge each other on overnight loans — apparently was the biggest one-day move by the central bank in recent memory. The Fed cut the rate to 3.5 percent from 4.25 percent — a move that represented the most dramatic signal it could can send of its concern about a recession.
"Time is of the essence and the president stands ready to work on a bipartisan basis to enact economic growth legislation as soon as possible," Paulson said in remarks to the U.S. Chamber of Commerce.
[...]
The rush of developments came on the same day that Democratic and Republican leaders in Congress were to meet with President Bush at the White House for talks on economic stimulus legislation. Such a measure presumably would involve tax rebates, business tax cuts and funding for a Democratic-led call for additional food stamp and employment aid.
Paulson said he was optimistic the administration and Congress could find common ground and "get this done long before winter turns to spring." Bush and the congressional leaders are looking for quick agreement on how to pump as much as $150 billion into the ailing economy to stave off a recession. The president last Friday put forward the broad outlines of a stimulus plan that would include tax cuts for individuals and businesses.
The administration's initial efforts failed to reassure global stock markets, which plunged Monday on rising fears that trouble in the U.S. economy could translate into weaker economic activity worldwide.
In his prepared remarks, Paulson did not specifically mention the steep plunge in global markets on Monday, which included declines in many markets that were the largest since the September 2001 terrorist attacks.
Labels: Dow Jones, economic collapse, economy, Federal Reserve System, Henry Paulson, stock market crash, Wall Street
Submit To Propellerposted by profmarcus at
1/22/2008
Global stock markets extended their shakeout into a second day Tuesday, plunging amid worries that a possible U.S. recession will cause a worldwide economic slowdown. The dramatic declines were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.
Japan's Nikkei 225 index, the benchmark for Asia's biggest bourse, skidded 4.4 percent in morning trading to 12,738.31 points, after dropping 3.9 percent Monday. Hong Kong's Hang Seng index was down 5.2 percent after plunging 5.5 percent the day before.
"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.
Labels: economy, stock market crash, Wall Street
Submit To Propellerposted by profmarcus at
1/21/2008
Stock Markets in Europe Plunge 7 Percent
Stocks fell steeply in Europe on Monday after sharp overnight declines in Asia, reacting to fears that an American recession was unavoidable and would crimp global growth. The DAX index in Germany closed off 7.16 percent and the CAC 40 in France lost 6.83 percent. British stocks fared slightly less badly; the FTSE 100 lost 5.48 percent. United States financial markets are closed today; Canadian and Mexican stocks were off sharply at midday.
Labels: economy, Europe, stock market crash, stocks, Wall Street
Submit To Propellerposted by profmarcus at
1/21/2008
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