Hello
For me it seems that the market had turned around on everything they were shouting a mouth (or so) ago, and i'm referring to the US's macros.
So, i read on FF's news thread that futures indicates a 100% rate cut this month, because of the sub-prime loan problems. But i don't see anyone going in on details on this fact.
In the first place a 0.25 point rate-cut won't help so much (after my personal oppinion won't help at all individuals) and going even far with this rate cut won't create any goods at all, just think at inflation, and again, with a lower rate more bad-record-borrowers, will borrow again money, at discount levels, creating something like a spiral of loans.
In the second place, bush-administration said will try to intervenes in this problem, I don't know how, but I really think not by a rate cut announced by Bush in front of the world.
Bernanke said on every public appearance (before the sub-prime) that inflation it the problem. So, if until now inflation was the problem, by a rate cut will create even bigger inflationary pressures. On his latest interviews, he mentioned that he will try to act only when honest(and good) borrowers are affected by the sub-prime. I recently read that only 1% of AAA have difficulties paying their loans (which is a very small percentage, and not necessary related to sub-prime).
I'm waiting your reply regarding this problem.
For me it seems that the market had turned around on everything they were shouting a mouth (or so) ago, and i'm referring to the US's macros.
So, i read on FF's news thread that futures indicates a 100% rate cut this month, because of the sub-prime loan problems. But i don't see anyone going in on details on this fact.
In the first place a 0.25 point rate-cut won't help so much (after my personal oppinion won't help at all individuals) and going even far with this rate cut won't create any goods at all, just think at inflation, and again, with a lower rate more bad-record-borrowers, will borrow again money, at discount levels, creating something like a spiral of loans.
In the second place, bush-administration said will try to intervenes in this problem, I don't know how, but I really think not by a rate cut announced by Bush in front of the world.
Bernanke said on every public appearance (before the sub-prime) that inflation it the problem. So, if until now inflation was the problem, by a rate cut will create even bigger inflationary pressures. On his latest interviews, he mentioned that he will try to act only when honest(and good) borrowers are affected by the sub-prime. I recently read that only 1% of AAA have difficulties paying their loans (which is a very small percentage, and not necessary related to sub-prime).
I'm waiting your reply regarding this problem.
"Abandon all hope, you who enter here"
La Divina Commedia, Dante Alighieri