Continue reading Fed Raises Bank Emergency Interest Rates

Fed Raises Bank Emergency Interest Rates originally appeared on BloggingStocks on Fri, 19 Feb 2010 08:00:00 EST. Please see our terms for use of feeds.

The U.S. economy lost only 11,000 jobs last month. The unemployment rate fell to 10%, from 10.2% Good news, right?

For the Federal Reserve, the new set of variables spells confusion for its stated policy: Interest rates will remain low for an "extended period."

Now the Fed is getting closer to the day when it will raise interest rates. While one month of low jobless numbers is not sufficient to say a trend has started, it will certainly bear upon the policy statement at the Fed meeting on December 15-16.

Continue reading Will the Federal Reserve start raising interest rates?

Will the Federal Reserve start raising interest rates? originally appeared on BloggingStocks on Mon, 07 Dec 2009 08:20:00 EST. Please see our terms for use of feeds.

Continue reading Gold soars as dollar continues to weaken

Gold soars as dollar continues to weaken originally appeared on BloggingStocks on Tue, 13 Oct 2009 13:50:00 EST. Please see our terms for use of feeds.

Continue reading Mortgage applications jump

Mortgage applications jump originally appeared on BloggingStocks on Wed, 23 Sep 2009 16:15:00 EST. Please see our terms for use of feeds.

Continue reading Homebuilder sentiment rises to highest level in 10 months

Homebuilder sentiment rises to highest level in 10 months originally appeared on BloggingStocks on Thu, 16 Jul 2009 18:00:00 EST. Please see our terms for use of feeds.

For the fourth month in a row, Bank of England interest rates will remain at the record low of 0.5%. In an announcement today, the UK's central bank said it would not expand its quantitative easing of financial markets, much to the surprise of the market. The bank has been buying up assets aggressively, printing cash to finance what is likely to be £125 billion in purchases by the end of this month.

Financial markets expected a much different play, involving an increase in this asset purchase target by another £25 billion (to £150 billion). This move would have let the Bank of England shove even more money into the economy through next month, which is when the bank publishes its latest quarterly economic forecast.

Continue reading Bank of England surprises: No expansion of quantitative easing

Bank of England surprises: No expansion of quantitative easing originally appeared on BloggingStocks on Thu, 09 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

Continue reading Home prices become more affordable

Home prices become more affordable originally appeared on BloggingStocks on Mon, 18 May 2009 17:00:00 EST. Please see our terms for use of feeds.

This morning, the Bank of England's Monetary Police Committee (BOE) decided to keep its interest rate at the current all-time low of 0.5%, as was expected. The BOE announced that it would continue its 75-billion pound program, which is supposed to increase the money supply in hopes of keeping deflation at bay.

The BOE stated that, "since its previous meeting a total of just over 26 billion pounds of asset purchases had been made and that it would take a further two months to complete that program." Some experts believe the BOE will hold interest rates at 0.5% "well into 2010." Before the bank made its decision, the 10-year yield was hovering around 3.34%.

Continue reading Bank of England holds interest rates

Bank of England holds interest rates originally appeared on BloggingStocks on Thu, 09 Apr 2009 08:30:00 EST. Please see our terms for use of feeds.

Continue reading Home prices continue to drop, but is it really a bad thing?

Home prices continue to drop, but is it really a bad thing? originally appeared on BloggingStocks on Thu, 12 Feb 2009 17:04:00 EST. Please see our terms for use of feeds.

Continue reading Oil moves higher despite bearish inventory report

Oil moves higher despite bearish inventory report originally appeared on BloggingStocks on Wed, 28 Jan 2009 18:15:00 EST. Please see our terms for use of feeds.

Bank of England lowers interest rates to lowest point since The Revolution originally appeared on BloggingStocks on Fri, 09 Jan 2009 18:00:00 EST. Please see our terms for use of feeds.

Jan. 22: Dow 11,971 (down 128 points); trading range, 658 points

The specter of continuing the ugliness seen overnight in the global equity markets and a 95% decline in fourth-quarter (2007) net income at Bank of America (NYSE: BAC) combined to shake up those in charge of U.S. monetary policy.

So, facing the possibility of a 500-point drop in the Dow following the long holiday weekend, the Fed sprang into action early to shore up the markets.

The move was a 75-basis-point pre-market intermeeting cut just eight days before the Fed's regularly scheduled meeting to drop the fed funds rate to 3.5% and the discount rate to 4%. The Fed made this move "in view of a weakening of the economic outlook and increasing downside risks to growth," adding, "appreciable downside risks to growth remain."

The Dow battled all day to recover from an early session drop of 459 points to close down only 128 by the closing bell.

Greg Tucker is the executive editor of OptionsZone.com.

10 craziest days on Wall Street in 2008: #8 We've got a bad feeling about this ... originally appeared on BloggingStocks on Sat, 03 Jan 2009 12:30:00 EST. Please see our terms for use of feeds.

March 18: Dow 12,392 (up 420 points); trading range, 435 points

Just one day after the collapse of Bear Stearns, the market rallied on a 75-basis-point Fed rate cut and better-than-expected earnings reports from Goldman Sachs (NYSE: GS) and Lehman Brothers (OTC: LEHMQ).

Looks like someone wasn't paying attention.

The clear focus was on the much-anticipated Fed cut that dropped the fed funds and discount rate to 2.25% and 2.5%, respectively.

There was a slight pause during the session, as some hoped for a 100-basis-point cut, but traders pushed onward to finish strong and add another 100 points to the Dow before the close.

All sectors rallied into positive territory for the session and the S&P 500 posted its biggest one-day percentage move since October 2002.

Greg Tucker is the executive editor of OptionsZone.com.

10 craziest days on Wall Street in 2008: #9 The day after (Bear Stearns) originally appeared on BloggingStocks on Sat, 03 Jan 2009 11:30:00 EST. Please see our terms for use of feeds.

This strategy went from being a modestly successful trade through October to a hero-sized trade in the past 45 days.

The Fed funds rate, the most widely followed interest rate the banks charge each other for overnight lending, topped out in August 2006, at 5.25%.

When the Fed started easing rates thereafter, no one at the economic think tanks forecasted anything close to what we are seeing today (namely a Fed funds rate of zero to 0.25% -- a decline of a full 5% in 17 months).

The decline in rates started out so orderly and coordinated that it seemed almost too good to be true, and the Dow Jones Industrial Average hit an all-time high, topping 14,000 for the first time in July 2007.

However, the quarter-point cuts gave way to a three-quarter-point cut, or 75 basis points, on Jan. 22, 2008, signaling that the Fed was seeing a material breakdown in the credit and housing markets. Following that seemingly radical rate cut, just eight days later on Jan. 30, the Fed again slashed the Fed funds rate by another half point, or 50 basis points, to 3%.

From there Bernanke & Co. held steady for a couple months to see if any good would come of their efforts.

When evidence of further erosion in the credit markets surfaced with the impending collapse of Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), Indy Mac, Bear Streans and Lehman Brothers (OTC: LEHMQ), the Fed lopped another three-quarters of a point off the Fed funds rate, taking it down to 2.25% on March 18.

That was considered the absolute floor at the time, a level that would stick. But that wasn't the case.

Continue reading Best Trades of 2008: #2 Getting long and staying long the 30-year Treasury bond

Best Trades of 2008: #2 Getting long and staying long the 30-year Treasury bond originally appeared on BloggingStocks on Wed, 31 Dec 2008 12:00:00 EST. Please see our terms for use of feeds.

Since the stock market is down so much I have been buying something in the fourth quarter almost every week. I have been patient and have been expanding my watch list. The difficulty for me is that I feel like almost everything is on sale -- but is everything a bargain?

Maybe not; maybe I'm delusional. Perhaps that is because I am tuned into another time and place when I would have been dancing in the streets if I were able to acquire Anglo American ADR (NASDAQ: AAUK) or General Electric (NYSE: GE) for pennies on the dollar. Maybe that is all these stocks are worth? That is what Wall Street currently thinks. That is what Main Street currently thinks. There is a lot more bad news than good.

Then why is Warren Buffett buying, and Carl Icahn and Ken Heebner? After all, I'm just following in their shadows.

The reason is that most investors are simply focused on all the bad news. That is what has most folks' attention and that is making the market -- bankruptcies, billions of dollars in losses, government out of control, Wall Street out of control and more. There is also serious fear things will get worse. If you lost money in the stock market (all of us), or lost your job or your house or any combination of the above, then things look bleak and for now they are. However, we should not be investing for now; we should be investing for the future.

Consider the following elements that support a recovery in the next year. I do not mean a boom, just a recovery -- just a more positive investing environment.

1) By spring it is estimated the government will have poured $2 trillion dollars into an economy of $13 trillion over a 12-month period. Not only is this a market stimulus, but it may prove to be highly inflationary, and if so equities are a better place to be then cash.

Continue reading Serious Money: Can everything be a bargain?

Serious Money: Can everything be a bargain? originally appeared on BloggingStocks on Fri, 26 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

The government is printing money like there's no tomorrow and running record deficits. So why isn't inflation out of control? To answer that, we need look no further than Economics 101. When demand exceeds supply, prices rise and when supply exceeds demand, prices fall.

Up until July 2008, commodity prices were rising because institutions were able to borrow money to go long commodities and short the dollar. As a result, the demand for commodities exceeded their supply and prices rose -- contributing heavily to rapid inflation. For instance, oil rose from $24 a barrel in January 2001 to peak in July at $147 a barrel. But since then, this commodity trade has evaporated along with access to debt -- and oil now trades 70% lower at $43.

But this fall, there were some slight problems with the financial markets -- for instance, the government decided to let Lehman Brothers file for bankruptcy. This financial collapse has caused banks to clamp down on lending. And since consumers, which account for 70% of GDP growth, depend so heavily on borrowing to finance their consumption, an end to lending cuts way back on their purchasing power. So does their $10 trillion loss of housing and stock wealth in the last year. With the disappearance of debt, supply exceeds demand and prices tumble.

Continue reading With $1 trillion deficit and $11 trillion national debt, why no inflation?

With $1 trillion deficit and $11 trillion national debt, why no inflation? originally appeared on BloggingStocks on Wed, 10 Dec 2008 11:00:00 EST. Please see our terms for use of feeds.

Continue reading Oil gets a bounce from anticipated rise in Chinese demand

Oil gets a bounce from anticipated rise in Chinese demand originally appeared on BloggingStocks on Wed, 26 Nov 2008 12:15:00 EST. Please see our terms for use of feeds.

Continue reading Fed October minutes signal more rates cuts, deflationary fears

Fed October minutes signal more rates cuts, deflationary fears originally appeared on BloggingStocks on Thu, 20 Nov 2008 13:41:00 EST. Please see our terms for use of feeds.

Continue reading Mortgage applications inch higher last week

Mortgage applications inch higher last week originally appeared on BloggingStocks on Thu, 13 Nov 2008 17:20:00 EST. Please see our terms for use of feeds.

Continue reading Short-term interest rates fall to lowest level since Lehman failure

Short-term interest rates fall to lowest level since Lehman failure originally appeared on BloggingStocks on Mon, 03 Nov 2008 09:55:00 EST. Please see our terms for use of feeds.