25 BPS cut and one dissenter.

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graphrix_IHB

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<p><em> The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent. </em></p>

<p><em>


Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today's action, combined with the policy actions taken earlier, should help promote moderate growth over time. </em></p>

<p><em>


Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. </em></p>

<p><em>


Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth. </em></p>

<p><em>


Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; and Kevin M. Warsh. Voting against was Eric S. Rosengren, who preferred to lower the target for the federal funds rate by 50 basis points at this meeting. </em></p>

<em>


In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.</em>





Now this is not pretty:





<img alt="" src="http://img108.mytextgraphics.com/photolava/2007/12/11/dow1211-48ssiqzx9.jpg" />
 
<p><strong>Three-month dollar LIBOR steady at 5.11% after Fed move</strong></p>

<p>SAN FRANCISCO (MarketWatch) -- The three-month dollar London Interbank Offered Rate was trading at 5.11%, nearly unchanged from where it was before the Federal Reserve annnounced it cut both its benchmark fed funds rate and the discount rate by a quarter point each, disappointing investors who wanted deeper cuts. "The markets had priced in a 25 basis point cut regardless, and you can see by the reaction in the equities market that the market wanted more," said Amarjit Sahota, currency strategist at HiFX. But the Fed's statement "bascially tells the market there's a likelihood of further cuts, so I would expect to see this LIBOR shift lower again, and I'm surprised it hasn't yet." The three-month LIBOR often trades close to the fed funds rate, but has been trading at a premium in recent weeks, which indicates banks are reluctant to lend to each other.</p>
 
<p>Down 250 and counting.....guess WS didn't like the amount of the cut.....</p>

<p><img src="http://quote-web.aol.com/?s=$INDU&e=DJI&dur=999&type=mountain&t=1" alt="$INDU: Chart" alt="" /> </p>
 
Just bought more SRS at 101 and am holding SKF still from when I bought back in a bit premature at 97. I made over 20% on each last time, hopefully there will be a repeat performance. I think good news on housing is going to be very hard to come by until we starting talking about the next rate cut.
 
If the rate cut had been .5 point, the market would've closed higher. The "rally price" up to yesterday already factored in the .25 point cut, which is why I sold all my stocks yesterday.





I'm done with stocks for 2007.
 
<p><em>I'm done with stocks for 2007.</em> </p>

<p>Amen, brother. I'm in CD's now, just sold the last bit of stock a week ago. It's just too hard to read right now....and I'm worried that I'll lose my supplemental retirement money.</p>
 
<p>Yeah, but they're all ready saying.....<a href="http://www.youtube.com/watch?v=gKpKSZGSkuo">YouTube - Thank You Sir May I Have Another</a></p>
 
<p>Each cut is another nail in the coffin for homeowners. Everytime mortgage rates start coming down, uncle ben cuts and then bond yields hop up. </p>

<p> </p>
 
<strike>"You'll get twenty five and like it!" <img alt="" src="images/smiley/msn/angry_smile.gif" /></strike>


- Ben





Ha ha! I was kidding! Geez.... can't you Wall Street folks take joke? Eh, well the kids and I, here at the Fed, set up short positions before we released our statement yesterday. That was pretty smooth, huh?





Anyway, we need to make it up to you. So... sorry about that, hehe. How about $64 billion fiat dollars to play with. We have cheap rates, currency swaps, a "term auction facility", and a sense of humor. Hey, we don't even care what garbage you use as collateral, or what it is <em>really </em>worth. Whatever the price you say it is worth, then we believe you.





Do you still love me Wall Street?





Ben





P.S. WTF? Only 41 points up on the Dow? Come on... show some love for your favorite Fed chief.
 
LawyerLiz, Alan Greenspan was bad. I'm not saying that Bernanke is even competent, but he was left in an impossible position. We have to pay the price for Greenspan's mistakes sooner or later, and it appears that it is going to be sooner.
 
I don't have an economic background, but just wondering what everyone thinks how the US economy will be due to Greenspan's policies.
 
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