Rate cut orgy

Fed Orders Emergency Rate Cut of Half a Percent

The Federal Reserve and a consortium of European central banks today announced a half apercentage point reduction in a key interest rate, a coordinated effort to stave off an economic slump even as they continue struggling to tackle a crisis in global financial markets.
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Joining the rate cut were central banks in Canada, England, Sweden, Switzerland and the European Central Bank. Central banks in China and Hong Kong acted separately to cut rates, a move the Australian central bank had taken the day before.

With commodity prices falling and concerns about an economic slowdown taking root around the globe, the banks in a joint statement said it was time to shift the focus from controlling inflation to bolstering growth. The Fed's target rate affects an array of other interest rates at commercial banks. Lower rates make it cheaper for companies to borrow to invest in offices, factories and equipment, and bring down the cost of a variety of consumer credit options, such as bank credit cards and auto loans.

Another box ticked off on our inexorable economic decline. Every central bank in the world is cutting lending rates. I have no idea whether it will work, I assume it will have some positive effect on short term lending. But short term lending really isn't the problem we need to fix. The problem is that too many companies bought worthless shit and too many companies insured (excuse me 'credit swapped') the worthless shit and now when it comes time to collect the worthless shit is still worthless. That's not a lending/liquidity problem, that's a bad asset problem. It seems like we're way past the point where standard FED actions like this make any kind of real difference.

It does seem to have mitigated today's foreseeable Dow drop to about 100/150 points as of post time. That, of course, could change and drop another 500. But at least there doesn't seem to be any large, continued panicking and pants shitting on Wall Street. The foreign markets........no so much. Lots of pants shitting. But hey, that seems to be what our entire bailout policy seems to be built around now: reacting irrationally to stock market drops with short term patches. It's just delaying our financial apocalypse. Hopefully they can delay it until the spring, so we can fight it out and make power mad territory grabs for precious resources in warm weather. At least think that far ahead Bernanke. I will not storm the Flesh Reaver Citadel to kill the non-believers in December. I refuse.