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.

It was a quiet week, but here are highlights from this past week's earnings coverage from BloggingStocks:

• Amgen Inc. (NASDAQ: AMGN) earnings growth prospects for 2009 make the stock worth a look.
• Big Lots Inc. (NYSE: BIG) offered no 2009 guidance but may benefit from bankruptcies of other retailers.
• Cal-Maine Foods Inc. (NASDAQ: CALM) Q2 earnings fell more than expected but revenue rose.
• Chevron Corp. (NYSE: CVX) said it will soon post preliminary Q4 results in the face of falling oil prices.
• Piedmont Natural Gas Co. Inc. (NYSE: PNY) reported a widened Q4 loss while revenue improved.
• Take-Two Interactive Software Inc. (NASDAQ: TTWO) earnings prospects may make the stock a bargain.

Also, a survey indicated that U.S. corporate profits in the fourth quarter probably fell for the sixth straight quarter. Interest cuts haven't helped bank earnings, will the Fed buying mortgage-backed securities do better? And, are food stocks still a defensive play?

Upcoming earnings releases include Bed Bath & Beyond (NASDAQ: BBBY), Constellation Brands (NYSE: STZ), Family Dollar (NYSE: FDO), and Monsanto (NYSE: MON).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Amgen, Big Lots, Cal-Maine, Piedmont, Take-Two originally appeared on BloggingStocks on Sat, 03 Jan 2009 13:40:00 EST. Please see our terms for use of feeds.

The members of the G7 admit that the global economy is in real trouble. Now they are asking themselves whether they can do anything about it.

Officials at the G7 summit did say that interest rates will have to come down. An official from the European Union said that taxes could be cut further. Many in the private sector don't think this can offset problems in the credit markets. "The problems are going right through all parts of the financial markets and there's not much the G-7 can do about this,'' said Gilles Moec, an economist at Bank of America Corp. (NYSE: BAC), quoted by Bloomberg.

To say that large governments cannot dampen the downturn is cynical. Whether they will act quickly is a very fair question to raise. A sharp cut in personal and corporate tax rates and more drops in interest rates are likely to cause a pick-up in economic activity. It is also almost certain to cause inflation, but that may be the price that must be paid to keep a severe recession at bay.

The slowness of governments is the enemy now. If the G7 countries can't get tax and rate stimulation packages in place during the current quarter, it will almost certainly be too late.

Douglas A. McIntyre is an editor at 247wallst.com.

G7 countries look at interest rate and tax cuts originally appeared on BloggingStocks on Sun, 10 Feb 2008 13:10:00 EST. Please see our terms for use of feeds.

The Fed is scheduled to announce the results of its latest rate-setting meeting at 2:15 this afternoon. Most analysts expect it to cut rates -- at least 25 basis points (100 basis points = 1%). I'm just not sure I understand why the Fed keeps cutting.

There are two reasons that come to mind as possibilities. First, the stock market seems to love hints that the Fed will cut interest rates. Since the summer, whenever the stock market fell a few hundred points, Ben Bernanke or another Fed governor would give a speech using key words such as "flexibility" and the stock market would rally. That's what happened a few weeks ago when the Dow dropped below 13,000 and it magically rallied 750 points.

A second reason is that the Fed thinks that a recession is in the forecast due to a freeze up in the credit markets, and that it's better off cutting rates to ease the pain. If a doctor had only one kind of medicine -- say, aspirin -- then the doctor would prescribe it to all patients, because it was better to give the patient something than nothing at all. This approach would work if the patient had a headache -- but it would be less effective if the patient had cancer.

Continue reading Why is the Fed cutting rates?

Why is the Fed cutting rates? originally appeared on BloggingStocks on Tue, 11 Dec 2007 07:54:00 EST. Please see our terms for use of feeds.

Investors awaiting Tuesday's expected interest rate cut seem to be forgetting that Fed Chairman Ben Bernanke is an economist. He isn't a magician.

E.S. Browning of the Wall Street Journal (subscription required) argues pretty persuasively that investors may be pinning "too much hope" on the rate cut.

"...such a rate cut would offer little immediate help for the fundamental problems weighing on the nation's economy and financial markets," he writes. "These include a worsening housing slump and high gasoline prices, which are damping consumer spending, and fears of further defaults on the billions of dollars of low-quality loans that have been used to finance mortgages and corporate takeovers."

Of course, investors will be over the moon after the rate cut is official and send the stock market skyrocketing. But don't order the champagne yet. Goldman Sachs Group Inc. (NYSE: GS) Chief US Economist Jan Hatzius told the Journal that the impact of the rate cut may not be as great as it was in 1998 when, unlike today, the economy's major problems originated outside the U.S.

In addition to waiting for puffs of white smoke from Bernanke & Co., investors will be paying close attention to the Wall Street firms. including Goldman, Merrill Lynch & Co. (NYSE: MER) and Lehman Brothers Holdings Inc. (NYSE: LEH), that report earnings this week, to see how ugly things have gotten.

Of course, markets don't stay in panic mode forever but remember it took years for the subprime mortgage crisis and credit crunch to develop. A single act by the central bank can't solve these problems overnight. Investors need to set their expectations accordingly.

Ben Bernanke doesn't have a magic wand originally appeared on BloggingStocks on Mon, 17 Sep 2007 07:30:00 EST. Please see our terms for use of feeds.

This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

You could make the argument that the Chairman of the Federal Reserve is the second most important man in the world. (On Sept. 18 the Fed is expected to cut interest rates to mitigate damage done by recent problems in credit markets). It is true, that when the Fed Chief talks, the WHOLE world listens -- and reacts -- so everyone was a bit apprehensive when long-running Fed Chairman Alan Greenspan finally stepped down last year to be replaced by Ben Bernanke.

While it is still way to early to try to compare the old with the new, there have been some signs that the "new kid on the block" is going to be taking a different route in his role as Fed Chief. Greenspan, aka the "Maestro," was viewed as a genius while in office, but as time has passed, week by week the Greenspan legacy seems to be eroding little by little. The general impression of the "Great Inflator" Greenspan has definitely shifted to where most people recognize that he was an instigator for inflation who was afraid to let the markets correct themselves to avoid forming bubbles.

It is also true that Greenspan managed to remain in control of the Federal Reserve for 18 long years (a record for the position), but the question really is how? How did Greenspan manage to remain in the seat of one of the most powerful positions in the country for such a long period? The answer to that question is that he pleases every president that he serves. How did Greenspan manage to do this? By dropping interest rates whenever any hint of trouble hit the market. Think back to 1998 when Greenspan cut rates three times after the collapse of Long Term Capital Management LP.

Continue reading Money Face-Off: Alan Greenspan vs. Ben Bernanke

Money Face-Off: Alan Greenspan vs. Ben Bernanke originally appeared on BloggingStocks on Sat, 15 Sep 2007 13:10:00 EST. Please see our terms for use of feeds.

After my rant yesterday, The Dow throws a 280 point hissy fit!, resulting from my unhappiness about the behavior of the market response to the rumor mill, I was sort of happy today to find investors coming back to their senses ... maybe.

So I followed with I guess the Dow hissy fit was short lived, and now am troubled even though the market has responded positively to what I thought was bargain hunting, but turns out might also be more rumors and speculation about a cut in the interest rate that was fed by the fed, by Bernanke himself ... make up your mind already. Bernanke Wants Help for Homeowners, or so the story goes. It does not say how exactly help will come.

The harshest comment I received to my second post, which is not far from my own thinking, was from Cullen:

• The Fed should keep rates where they are!
  
  Let the greedy speculators and the reckless mortgage lenders and the foolish or careless borrowers take their lumps! The free markets NEED to adjust. Those in the lending business NEED to return to SOUND lending practices. We consumers NEED to learn a lesson from this. Live within your means!

Continue reading Bernanke's Fed: Maybe they will and maybe they won't

Bernanke's Fed: Maybe they will and maybe they won't originally appeared on BloggingStocks on Wed, 29 Aug 2007 21:00:00 EST. Please see our terms for use of feeds.

Continue reading It's not easy to sell your home anymore

It's not easy to sell your home anymore originally appeared on BloggingStocks on Mon, 20 Nov 2006 16:53:00 EST. Please see our terms for use of feeds.