BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[The Stock Market and the Discount Rate Increase: Damage Control and Mixed Messages!]]>http://www.bloggingstocks.com/2010/02/19/the-stock-market-and-the-discount-rate-increase-damage-control/http://www.bloggingstocks.com/2010/02/19/the-stock-market-and-the-discount-rate-increase-damage-control/http://www.bloggingstocks.com/2010/02/19/the-stock-market-and-the-discount-rate-increase-damage-control/#commentsFiled under: , , ,

The Federal Reserve Board raised the discount rate by 0.25% after the close of the market Thursday, raised the minimum bid for the Term Auction Facility (TAF) by 0.25%, and shortened the maximum maturity for primary credit loans to overnight. The stock market has gone lower in reaction to this statement.

Several Fed officials have issued comments emphasizing that this is not the beginning of monetary tightening. However, uncertainty still hangs over the markets despite these statements.

Continue reading The Stock Market and the Discount Rate Increase: Damage Control and Mixed Messages!

The Stock Market and the Discount Rate Increase: Damage Control and Mixed Messages! originally appeared on BloggingStocks on Fri, 19 Feb 2010 13:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bernankediscount rateFederal ReserveFOMCTerm Auction FacilityFri, 19 Feb 2010 13:40:00 EST<![CDATA[10 craziest days on Wall Street in 2008: #9 The day after (Bear Stearns)]]>http://www.bloggingstocks.com/2009/01/03/10-craziest-days-on-wall-street-in-2008-9-the-day-after-bear/http://www.bloggingstocks.com/2009/01/03/10-craziest-days-on-wall-street-in-2008-9-the-day-after-bear/http://www.bloggingstocks.com/2009/01/03/10-craziest-days-on-wall-street-in-2008-9-the-day-after-bear/#commentsFiled under: , , ,

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.

Permalink | Email this | Comments]]>discount rateDiscountRatefed funds rateFedFundsRateinterest ratesInterestRatesSat, 03 Jan 2009 11:30:00 EST<![CDATA[Message to Fed: Leave rates alone!]]>http://www.bloggingstocks.com/2008/10/28/message-to-fed-leave-rates-alone/http://www.bloggingstocks.com/2008/10/28/message-to-fed-leave-rates-alone/http://www.bloggingstocks.com/2008/10/28/message-to-fed-leave-rates-alone/#commentsFiled under: , , , , , , , , ,

Enough already -- leave something in the tank for next time!

When the Federal Reserve Board meets on Wednesday they should leave interest rates where they stand. The lack of liquidity in the market place is not coming from high interest rates. It is coming from a de-leveraging of the economy.

The Federal Discount Rate currently is 1.75% and was 2.25% less than a month ago. Alan Greenspan was too quick to lower the rates before and too slow to raise them when he should have. Ben Bernanke was too slow to lower them this time around and I do not want him to be too hasty to lower them further now when he should take a breath.

We're all rooting for you, Ben (what choice do we have?), so deal with the cash sitting on the Treasury's desk now and get back to this interest rate issue next month. Let the European banks lower their rates. That will strengthen the dollar and might help to stabilize oil prices, which have been dropping rapidly. Lower oil prices will put billions of dollars back into consumer hands and the overall economy. Lower oil prices will do more good than lower interest rates.

We need stability! We need predictability! Part of the reason we got into this mess was cheap credit and poor foresight on the part of the government, investors, and lenders.

Continue reading Message to Fed: Leave rates alone!

Message to Fed: Leave rates alone! originally appeared on BloggingStocks on Tue, 28 Oct 2008 15:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Alan GreenspanAlanGreenspanBen BernankeBenBernankeDiscount RateDiscountRateDollarfeaturedFederal Reserve BoardFederalReserveBoardInterest ratesInterestRatesOilSheldon LiberSheldonLiberTue, 28 Oct 2008 15:45:00 EST<![CDATA[Wall Street area taps most loans in Fed's first term auction facility]]>http://www.bloggingstocks.com/2007/12/28/wall-street-area-taps-most-loans-in-feds-first-term-auction-fac/http://www.bloggingstocks.com/2007/12/28/wall-street-area-taps-most-loans-in-feds-first-term-auction-fac/http://www.bloggingstocks.com/2007/12/28/wall-street-area-taps-most-loans-in-feds-first-term-auction-fac/#commentsFiled under: , ,

The U.S. Federal Reserve announced that $16.5 billion of its first $20 billion in loans under its term auction facility went to institutions in the New York district [subscription required], an area that includes the headquarters of some of the nation's largest banks, The Wall Street Journal reported on Friday. The Fed doesn't disclose loan sizes or borrowers' identities.

Meanwhile, the Fed's Dallas district reported loans of $1.4 billion, while the St. Louis district reported loans of $1 billion.

Earlier this fall, the Fed established the term auction facility as an alternative short-term loan operation because banks were reluctant to access the Fed's traditional short-term window, the discount window. Banks became reluctant to borrow from the discount window because of the stigma attached: doing so can telegraph distress to other banks.

Fed Analysis: So far, the Fed's effort, along with the effort of the European Central Bank and other major central banks, to provide short-term loans to banks appears to be working. Both overnight and two-week liquidity has improved, as measured by yield spreads and transaction conditions. A later announcement by the Fed to maintain the term auction facility "for as long as necessary" further calmed the markets. Still, investors/readers should keep in mind that the housing correction / credit quality issue is young: given the plethora of at-risk subprime loans and related assets, more default declarations are undoubtedly ahead in 2008.

Wall Street area taps most loans in Fed's first term auction facility originally appeared on BloggingStocks on Fri, 28 Dec 2007 16:11:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Bank of CanadaBank of Englandbond marketBondMarketcredit marketsdiscount ratediscount windowECBEuropean Central BankhousinginthenewsLIBORliquiditymonetary policymortgage ratesSwiss National Bankterm auction facilityU.S. Federal Reserveyield spreadsFri, 28 Dec 2007 16:11:00 EST<![CDATA[Fed, central banks team up to stem credit crunch]]>http://www.bloggingstocks.com/2007/12/12/fed-central-banks-team-up-to-stem-credit-crunch/http://www.bloggingstocks.com/2007/12/12/fed-central-banks-team-up-to-stem-credit-crunch/http://www.bloggingstocks.com/2007/12/12/fed-central-banks-team-up-to-stem-credit-crunch/#commentsFiled under: , , ,

The U.S. Federal Reserve's effort, in coordination with the European Central Bank and three other central banks, to add liquidity by special and traditional means represents a prudent step to maintain properly functioning credit markets, economists and analysts told BloggingStocks on Wednesday.

Further, the move is the largest coordinated international monetary policy action taken since the world's major central banks provided liquidity to ensure proper market function following the September 11, 2001, terrorist attack on the United States.

The Fed announced Wednesday that it would inject up to $40 billion in reserves into money markets via a new, temporary program called a "term-auction facility." The emergency funds would be made available to banks next week via auction process -- $20 billion each -- on December 17 and December 20. The Fed also said it is setting up lines of credit with the European Central Bank and the Swiss Central Bank that could be used for additional resources.

Continue reading Fed, central banks team up to stem credit crunch

Fed, central banks team up to stem credit crunch originally appeared on BloggingStocks on Wed, 12 Dec 2007 16:50:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Bank of EnglandBen BernankeBernankebond marketBush Administrationcredit crisiscredit crunchcredit marketsdiscount rateECBeconomic growthEconomicGrowthEuropean Central BankFedFed funds rateforeclosureshousinginthenewsmonetary policymortgage backed securitiesmortgagesrecessionsuprime mortgagesSwiss Central BankU.S. economyU.S. Federal ReserveWed, 12 Dec 2007 16:50:00 EST<![CDATA[The problem with the Fed's rate cuts]]>http://www.bloggingstocks.com/2007/12/11/the-problem-with-the-feds-rate-cuts/http://www.bloggingstocks.com/2007/12/11/the-problem-with-the-feds-rate-cuts/http://www.bloggingstocks.com/2007/12/11/the-problem-with-the-feds-rate-cuts/#commentsFiled under: , ,

Federal Reserve Chairman Ben Bernanke What is the right number for interest rates? 4%? 3%? 2%? No one knows for sure, and that's the problem. Investors are becoming like Pavlov's dogs, frothing at the mouth at the mere thought of an interest rate cut. Once the Fed accedes to their wishes, they are satisfied for a while but wind up wanting more and more cuts.

As today's market action shows, these people are never going to be satisfied. The Federal Reserve lowered short-term interest rates by one-quarter point to 4.25%, the third cut since September. It reduced the discount rate -- the rate the Fed charges banks to borrow money -- by the same amount to 4.75%. "A large minority of economists had projected a half-point cut in the federal funds rate," according to the Wall Street Journal.

The Federal Open Market Committee also remains as worried as ever about the economy.

"Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation," according to the statement from the FOMC. "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."

Continue reading The problem with the Fed's rate cuts

The problem with the Fed's rate cuts originally appeared on BloggingStocks on Tue, 11 Dec 2007 15:53:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>discount rateDiscountRateeconomyfeaturedfederal funds ratefederal reserveFederalFundsRateFederalReserveinterest ratesInterestRatesMartin FeldsteinMartinFeldsteinthe FedTheFedTue, 11 Dec 2007 15:53:00 EST<![CDATA[Fed may still consider half-point rate cut]]>http://www.bloggingstocks.com/2007/12/10/fed-may-still-consider-half-point-rate-cut/http://www.bloggingstocks.com/2007/12/10/fed-may-still-consider-half-point-rate-cut/http://www.bloggingstocks.com/2007/12/10/fed-may-still-consider-half-point-rate-cut/#commentsFiled under: , , ,

Fed Chairman Ben Bernanke The U.S. Federal Reserve is likely to continue to cut benchmark short-term interest rates by another quarter-point Tuesday, but in the view of some economists and analysts, it would not be totally unreasonable for the Fed to implement a half-point cut.

Economist David H. Wang told BloggingStocks that recent Fed data "seems to be indicating a clear risk of a recession, which is the argument for a 50-basis point [half-point] cut."

Wang noted that while the futures market is pricing in two more 25 basis-point cuts at the Fed's January and March 2008 meetings, and also pricing in 100% odds of a 25 basis-point cut and 28% odds of a 50-basis point cut Tuesday, recent negative economic news/data points may weigh on the Fed on Tuesday, and perhaps carry the day, producing a half-point cut.

Continue reading Fed may still consider half-point rate cut

Fed may still consider half-point rate cut originally appeared on BloggingStocks on Mon, 10 Dec 2007 09:36:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bush Administrationdiscount ratefeaturedfed fund ratesfiscal policyGDPhousinginterest ratesmonetary policymortgage defaultsmortgagesPaulsonrecessionsubprimeU.S. CongressU.S. economyU.S. Federal ReserveU.S. TreasuryMon, 10 Dec 2007 09:36:00 EST<![CDATA[Fed's Yellen joins economy-too-slow chorus]]>http://www.bloggingstocks.com/2007/12/04/feds-yellen-joins-economy-too-slow-chorus/http://www.bloggingstocks.com/2007/12/04/feds-yellen-joins-economy-too-slow-chorus/http://www.bloggingstocks.com/2007/12/04/feds-yellen-joins-economy-too-slow-chorus/#commentsFiled under: ,

San Francisco Federal Reserve Bank President Janet Yellen is on the wires again, becoming the latest Fed governor to note that the U.S.'s economic slowdown is bigger than she expected, Bloomberg News reported Tuesday.

Last week Fed Chairman Ben Bernanke and Vice Chairman Donald Kohn also noted that credit market woes fed by subprime mortgage and related asset defaults tipped the scales toward 'the downside risks to growth.'

Yellen said recent data on retail sales and consumer spending were not that encouraging, Bloomberg News reported.

Continue reading Fed's Yellen joins economy-too-slow chorus

Fed's Yellen joins economy-too-slow chorus originally appeared on BloggingStocks on Tue, 04 Dec 2007 11:23:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>Bernankebond marketcredit marketdiscount rateeconomyfed funds rateFederal ReserveGDPhousinginterest ratesinthenewsKohnmortgage ratesMortgageRatesmortgagesrecessionsubprime loansSubprimeLoansU.S. economyU.S. Federal ReserveYellenTue, 04 Dec 2007 11:23:00 EST<![CDATA[Shrinking deficits could drive 2008 dollar rally]]>http://www.bloggingstocks.com/2007/12/03/shrinking-deficits-could-drive-2008-dollar-rally/http://www.bloggingstocks.com/2007/12/03/shrinking-deficits-could-drive-2008-dollar-rally/http://www.bloggingstocks.com/2007/12/03/shrinking-deficits-could-drive-2008-dollar-rally/#commentsFiled under: , , , , ,

Could an ongoing shift in economic fundamentals drive a dollar rally in 2008? It's possible, currency analysts say, if the U.S. economy also follows-through with modest economic growth in 2008.

"I am confident that the dollar will have a significant rally next year, especially against the euro and the pound,'' Stephen Jen, the London-based head of currency research at Morgan Stanley told Bloomberg News on Monday. Jen expects the U.S. currency to strengthen to $1.35 against the euro by December 2008. "The deficits are shrinking fast.''

The dollar traded at $1.461 against the euro, at $2.0640 against the British pound, and at 110.46 yen against the Japanese yen Monday afternoon.

Continue reading Shrinking deficits could drive 2008 dollar rally

Shrinking deficits could drive 2008 dollar rally originally appeared on BloggingStocks on Mon, 03 Dec 2007 16:20:00 EST. Please see our terms for use of feeds.

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In almost all economic environments, the U.S. Federal Reserve is taciturn regarding its likely next monetary policy decisions.

But of late the Fed has deviated and taken a specificity-is-better route, with Federal Reserve Governor Randall Kroszner stating before a Manhattan group that another rate cut would probably provide few additional stimulative benefits for the U.S. economy.

"The current stance of monetary policy should help the economy get through the rough patch during the next few years," Kroszner said during remarks at the Institute of International Finance in Manhattan, Bloomberg News reported.

The Fed has cut benchmark interest rates twice, starting in September. The Fed Funds rate, the rate banks charge each other, now stands at 4.50%, and the discount rate, the rate the Fed charges banks for short-term loans, is at 5.00%.

In his IIF remarks, Kroszner added that he expected the housing recession to worsen, with weaker home sales, but that longer-term, he expects the U.S. economy to return to a sustainable growth rate after a difficult few months.

Fed Analysis: Kroszner's remarks were candid, if not the good news on interest rates Wall Street likes to hear from the Fed. Kroszner's candor indicates that The Fed is looking past October's 0.5% decline in Industrial Production and related, recent soft economic data, toward what the Fed believes will be an accelerating U.S. economy in Q1, stimulated by the Fed's September and October interest rate cuts. Nevertheless, the stand-pat Fed stance is likely to draw criticism in investor and economic circles if additional Q4 data reveals a barely-growing U.S. economy.

Fed hopes Street likes candor as much as good news originally appeared on BloggingStocks on Mon, 19 Nov 2007 15:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>discount ratefed funds rateFederalReserveGDPhousingindustrial productioninflationinterest ratesmonetary policymortgage ratesmortgagespricesRandall KrosznerRandallKrosznerU.S. economyU.S. Federal ReserveMon, 19 Nov 2007 15:28:00 EST<![CDATA[The Fed acknowledges, then changes, the financial landscape]]>http://www.bloggingstocks.com/2007/09/19/the-fed-acknowledges-then-changes-the-financial-landscape/http://www.bloggingstocks.com/2007/09/19/the-fed-acknowledges-then-changes-the-financial-landscape/http://www.bloggingstocks.com/2007/09/19/the-fed-acknowledges-then-changes-the-financial-landscape/#commentsFiled under: , , , , ,

Wall Street's initial evaluation of The U.S. Federal Reserve's decision Tuesday to lower both the fed funds rate and the discount rate by 50 basis points was that it represented a clear statement by the central bank that it's aware of impact of the subprime mortgage / housing sector slowdown's impact on the U.S. economy.

Wall Street cheered the Fed's decision, with the Dow jumping almost 200 points in the initial minutes after the announcement; the Dow closed at 13,739, up about 335 points; the Nasdaq closesd at 2,651, up 70 points .

The Fed cut the fed funds rate to 4.75% and the discount rate to 5.25%: most economists had expected a 25-basis-point cut in the fed funds rate, not a 50-basis-point cut.

Further, the Fed's decision was unanimous - another action suggesting that the Fed is aware of the seriousness of the economic slowdown in the U.S. In its statement, the Fed said, "Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally." Many economists estimate that the housing slump will reduce U.S. GDP growth by 1 percentage point, and possibly by more. These analysts also generally agree that a substantial, sustained housing slump is capable of driving the U.S. economy into a recession.

Continue reading The Fed acknowledges, then changes, the financial landscape

The Fed acknowledges, then changes, the financial landscape originally appeared on BloggingStocks on Wed, 19 Sep 2007 13:29:00 EST. Please see our terms for use of feeds.

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Even the Fed is getting nervous about the market. This morning, it cut the discount rate from 6.25% to 5.75%.

The agency said its move was to promote the restoration of orderly conditions in financial markets.

The Fed's website carried a statement explaining the move: "These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially."

The board's governors clearly believe now that tight credit conditions are killing the markets and threaten the economy.

The move is giving the market significant relief. S&P futures, which were down sharply early in the morning are now up 22 points and the market looks to open strongly in the green.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Fed feels heat, cuts discount rate originally appeared on BloggingStocks on Fri, 17 Aug 2007 08:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bankingbanking systemBankingSystembanksBen BernankeBenBernankediscount rateDiscountRateeconomyFederal ReserveFederalReservenasdaqnyseThe FedTheFedFri, 17 Aug 2007 08:40:00 EST