James Grant from “Grant’s Interest Rate Observer” on the Bailout

November 13, 2008 by · Leave a Comment
Filed under: Videos 

This is a great video with James Grant of “Grant’s Interest Rate Observer” which is a financial periodical.  This discussion is about our current financial system bailout that is in progress and the scandal it has caused.  James mentions the lack of enforcement of punishment for reckless individuals at the different firms.  He wants a defence of Capitalism & Free Markets, I absolutely agree with his assertion.  We have throw the free markets aside to bail out firms that should absolutely face the consequences of getting into their current position.  Greed took over and now Fear has to be revived.

We need to get the excessive leverage out of the system.  Firms that have committed acts that warrant their firms “insolvent”, should be liquidated and forced out of business.  Why do we not let firms that have made good decisions prosper? Why not have firms that made bad decisions, suffer the consequences? Why does precedence all a sudden not matter when we deal with market issues? Decisions we are making now will have a long term effect that we are not taking into account if we want a functioning market system.

Bloomberg Video:

Hope you enjoyed this video

The Fed cuts interest rate in emergency meeting by 50 basis points to 1.50%

October 8, 2008 by · Leave a Comment
Filed under: Global News 

No surprise, there was a 75% chance of a half percent rate cut at the next FOMC meeting at the end of the month.  The fact that they did this well before their meeting shows the dire situation and leaves the door open for another rate cute at the next meeting if the credit and stock market conditions worsen.  Along with this cut, other central banks are following suit to try and stabilize the global market.

I feel there is enough uncertainty in the credit market and risk with other banks that we are still going to see a sever contraction and much higher inflation in a time when consumer purchasing power and credit are being greatly reduced.  Just because there is “cheap” money available does not mean people want to borrow.

Release:

Central banks around the world cut interest rates in unison on Wednesday, responding to a worldwide clamor for concerted action to contain the worst financial crisis since the Great Depression.

The surprise announcement set off volatile trade in global stock markets, which have seen trillions of dollars in wealth wiped out over the past year. But it failed to win a ringing endorsement from any one market.

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Fed holds interest rates steady at 2% citing growth worries

August 5, 2008 by · Leave a Comment
Filed under: Industry News 

The Federal Reserve decided to hold our prime interest rates at 2% citing the risk to growth and added risk to additional inflation.    The decision vote was 10-1 when all was said in done.  With all the dissent from different reserve banks I am surprise the vote was almost unanimous.

It is also interesting seeing this statement in the Reuters release.  “However, the central bank omitted a phrase contained in the June statement that had said risks to growth appeared “to have diminished somewhat.””  Here is part of the release.

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