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Fed Cuts Lending Rate to Financial Institutions to 3.25%

biz.yahoo.com — The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans. What's the next domino to fall?

Bury
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  • Xios117, on 03/17/2008, -2/+29Our economy is a house of cards, the world market a gale force wind.
    What could possibly go wrong?
    • Napoleone, on 03/17/2008, -1/+7Yeah, but if we just add another layer of cards to it we should be just fine. /s
    • sanman, on 03/17/2008, -3/+6and Fed is pissing into that wind

      gold is looking better all the time
      • Xios117, on 03/17/2008, -0/+1Gold is looking great, unless you're a normal person who cannot afford to buy it at its extremely high prices (which are a result of everyone pissing themselves over the economy).
    • jesuswuzanalien, on 03/17/2008, -14/+1McCain Romney 08.
      • Qtip42, on 03/17/2008, -1/+8So you want this to continue eh? Because neither of them have a clue as to what "sound currency" means.
        • homah, on 03/17/2008, -0/+2Don't worry, McCain's close circle of friends will help us find more sunshine.
      • earlycj5, on 03/17/2008, -0/+8The original post did ask what else could go wrong.
    • shrewduser, on 03/17/2008, -0/+6its already too late, keynsian economics is only making things worse as well (why oh why didn't we give ron paul a go?) there is going to be some economic pain, there's no doubt about that... its only a matter of severity.
    • nalimca, on 03/17/2008, -0/+4When money is made from thin air, it evaporates fast.
  • Gemfinder, on 03/17/2008, -3/+12It sounds good on the surface but I'm wary. Look at the long picture: the lenders are getting that rate, but We The People won't ever see that. It'll stay around 5% for us, simply because of mark-up and profit. It's a lure, to get you to re-fi or jump on a loan you have no money to pay back. Which is what got us into this fix in the first place.
    • JigoroKano, on 03/17/2008, -2/+4This is a ***** pyramid scheme.
      • BaronSamedi242, on 03/17/2008, -0/+2Try 29% for most people. People who pay off their credit cards and revolving credit accounts on time, even, have found that their rates have been raised to 29%-33%.

        They get money at 3% - lend it at 29% - and cry crocodile tears that they need a bailout.
    • Xios117, on 03/17/2008, -0/+1No, the mortgage rates we receive are not determined directly by the Fed's cuts; rather, the one we get is affected and lowered in comparison to whatever the Fed's rate is.
      So no, we will never see the rate of 3.25%, but that was never the case or an option.
      PLEASE research before posting. :(
  • Xios117, on 03/17/2008, -2/+9Exactly, we're merely compounding the problem by cutting the rates.
    • mirunit, on 03/17/2008, -0/+1The alternative is?
      • brianjlowry, on 03/17/2008, -0/+1Let the market correct itself. The economy can't be on the rise all the time.
  • jesuswuzanalien, on 03/17/2008, -12/+1I'm a big hot shot investment banker who knows more about federal lending rate cuts than any other guy out there. I surmise that this is only a .25% decrease and therefore will not have a substantial impact on the financial institutions. These big investment banks will be able to secure their short term loans and be legit.
    • felman87, on 03/17/2008, -0/+6yeah, and I bet you have a huge penis too.
    • mike17032, on 03/17/2008, -0/+3Well as a male porn star with a 14 inch *****, I disagree.
    • Xios117, on 03/17/2008, -0/+1Indeed, it's all about appearing to be doing something about the problem, even if their "solutions" don't actually do or mean anything.
      So you say, "I'm right, why was I buried??"
      Well, that's because you used the words big shot in reference to yourself without anything resembling /s.
      GG.
  • lOvOl, on 03/17/2008, -1/+36More of the fake economy. Cutting rates won't do jack squat in the long-term and nor will any other type of financial engineering. The problem is that we have too many consumers relative to producers. Though technology and people working more hours has improved productivity in the overall economy, the real question is what are we being more productive in doing?

    Certainly people in the FIRE industries (Finance, Insurance, Real Estate) have been far more productive per worker over the last 10 years or so, however, the question begs whether or not these people are only being productive as parasites and crippling true productivity in industries such as manufacturing that actually improves our long-term standard of living.

    I would say that the decrease in manufacturing jobs would not be such a bad thing if those job decreases were the result of efficiencies made in areas like automation and logistics, however, all the evidence suggests that all that has happened is that our entire industrial base has been relocated to countries such as China and our "productivity" gains in terms of the balance sheets of American megacorporations only reflects the fact we basically have 2 Chinese slaves for every American working their asses off to support the bloated lifestyles of people who don't really produce anything.

    How many people do you know who have jobs, even high paying jobs, where they basically spin their wheels and don't do anything? How many lawyers and accountants do you know that have jobs that depend on the graft of government legislation that makes running a business so complex that their services are warranted as if they were allowed to tax the rest of America at will? How many people do you know who work at government jobs (the only employment sector that has steadily and consistently added to employment over the last 10 years), where there is little or no accountability in what they do, nor any sort of real mission statement for doing anything of productive value in the first place?

    Well all I can say is welcome to the United Socialist States of America where everyone is spinning their wheels with pride, but nobody is quite sure why, yet jobs somehow keep falling from the sky due to our seemingly unlimited capital. Unfortunately, that capital was mostly just an illusion and now we have a nation of 300 million people or more, legal and illegal, who are addicted to that gravy train economically, politically, and socially. Now that the drug supply looks like it is going to be cut off cold turkey, Americans like myself will have to do our best to suffer through the withdrawal symptoms brought on by a socialist economic system of phoney money or else just give up and kill ourselves.

    As John F. Kennedy once said "Ask not what your country can do for you, but ask what you can do for your country". This effectively means every in today's age that everyone should look in the mirror and (assuming they have a conscience) ask themselves the question "Am I A Parasite?". And if your answer is "yes", then start to think about what you can do as an American to have a symbiotic relationship with your fellow Americans, rather than just that of a bloodsucker who depends on others for their very survival, yet contributes nothing tangible to America in return.

    Until parasitism is rooted out of America at all levels of society, America will be hobbled with a gangrene leg that threatens to wipe out the rest of the body if it is not treated immediately.
    • COlson87, on 03/17/2008, -2/+11Unfortunate you won't be dugg up higher; the European bury brigade will likely come along.

      There are way too many socialists on Digg who don't have any concept of economics or free markets. Many here have a greatly misconstrued idea of what capitalism is and point to flaws in the United States which, ironically, all stem directly from central planning.

      News flash -- the United States is a socialist country. We are nowhere near a free market, capitalist society.
    • brad3378, on 03/19/2008, -0/+1Best comment I've read here in months. Seriously
  • idc5, on 03/17/2008, -1/+4Now is a good time to invest in foreign currency relative to the US dollar....
    • glacius99, on 03/17/2008, -0/+1Isn't that like saying "Buy high! Sell low!" when playing the stock market?
      • Xios117, on 03/17/2008, -0/+1That reply made me happy; thanks for giving me a laugh as I attempt to respond and quell idiocy taking place in this topic. :)
  • iillthe2nd, on 03/17/2008, -1/+19Insert a Ron Paul "I told you" here .....
    • sahaqiel, on 03/17/2008, -1/+3"You can't put hydrogen in the Hindenburg. It's gonna burn. Oh the humanities, oh the humanities!!"
  • turdblossom1, on 03/17/2008, -0/+5todays weather outlook predicts a 75% chance of cloudy skies and falling bodies
  • nachochease, on 03/17/2008, -5/+2The situation in the United States: A 9+ Trillion dollar debt, massive layoffs on the horizon, a collapsing currency, skyrocketing inflation, millions of foreclosures and negative wage growth. Thank God I don't live there, and never will.
  • Berkana, on 03/17/2008, -0/+3Our economy is only as dependent and sensitive to interest rates as its money supply is borrowed. Unfortunately for us, ALL of our money is borrowed, and more of it is owed than is in circulation. Remember this!:

    http://digg.com/business_finance/Our_Debt_based_Mo ...
  • BoDeeDoe, on 03/17/2008, -2/+5BUY GOLD AND SILVER...
  • mike17032, on 03/17/2008, -5/+4In before the Rontards babble on about "teh goldz standard".

    Not fast enough to be in before the digg eco-tards though.
  • RationalXubrnce, on 03/17/2008, -3/+3 This is all just bailing out the Titanic. The whole system is rotten. It's a debt based ponzi scheme and as sure as the sun will rise the dollar is doomed. Today should be interesting as a lot of people across the country are going to be waking up tot he reality that oil, silver and gold are good ways to keep the Federal Reserve from stealing your savings.
  • davidwasman, on 03/17/2008, -4/+2Be honest. Most of you are digging this becuase Joe submitted it, aren't you?
  • greensuit, on 03/17/2008, -2/+2You can sulk and worry about the economy, or try to invest in what is sure to increase. Gold stocks are booming, because the price of gold will boom. Look at AEM. If you had purchased 800 shares last Monday, you would be up by $9000 today. And, you will probably be up another $9000 by next week. Also look at AUY, similar story. Read about it in the WSJ today, where they say that gold stocks are booming faster than the price of gold, and they explain why. Or, just sit back and watch your dollar and 401K shrink daily.
  • keraneuology, on 03/17/2008, -1/+9A few points about this that should set your blood boiling:

    1. Alan Greenspan is largely responsible for this. He started out with orders to prevent even a minor hiccup (ie: a natural market correction) from making Bill Clinton look bad. He artificially propped up the economy even though he KNEW that this would be the inevitable result.

    2. Alan Greenspan knew that the junk mortgage loans would blow up in the economy's face eventually. Didn't care.

    3. By the time dub the shrub came along the market was already set up like a house of cards so the priority became "let's hold it together long enough for me to get out of office"

    4. The US is now the world's 2nd largest economy for the first time since WWII. Thanks, guys.

    5. All of those smegheads at Bear Stearns who drove the stock from $170 last year to $2 this year collected hundreds of millions of dollars in salary, perks, performance bonuses (apparently if your performance sucks you still get a bonus). Their abject stupidity, arrogance and incompetence forced the taxpayers to bail out a handful of really rich people and some investment funds, and yet will not be fired (at least not without a generous golden parachute) and will have no problem finding another high-paying job elsewhere.

    The system is broken - the incompetent sphincters who provide -zero- productivity to the economy (such as Chelsea Clinton - her mom was right, venture capitalists don't really work for a living) are the ones who get the most pay.

    Greenspan should be in jail. The executives at Bear Stearns should be criminally prosecuted, forever surrender their legal/securities licenses and banned from the industry.
    • Xios117, on 03/17/2008, -0/+1...
      Yeah that's pretty much it in a nutshell.
      Anyone who singularly blames the poor bastard who's in office when the problem occurs is hopelessly myopic.
  • greensuit, on 03/17/2008, -1/+3The US economy has over 500 trillion dollars of junk bonds (derivitives) which back everything and are totally worthless. the whole world GDP is only 50 trillion dollars. There increasingly is no way to pay off the worthless junk that backs our economy and the world knows it. Where did it come from? Well the Bear Stearns of the world sold bonds from all the fortune 1000 companies, and now it is only worthless paper. The world is waking up to the fact that gold, silver, copper, oil, gas, and all comodities have enduring value, but paper has none. Watch the price of gold today and for the next few weeks, it will be amasing. It's not too late to get in on it, as $1000 gold will soon seem cheap.
  • gehlm, on 03/17/2008, -0/+8There is nothing wrong with high interest rates. High rates encourage saving. Low rates encourage borrowing. This country must *stop* borrowing. I've seen my short-term saving rate drop from 4.95% to 3.35% in the last 12 months. The only ones who benefit from low rates are bankers. Wake Up!
  • marklittle, on 03/17/2008, -0/+3Yet another government action that serves to bailout the banks and ensure profits even in this downturn at the expense of borrowers and tax payers. According to http://www.helocbasics.com rates on second mortgages are around 9%, and home loan rates are jumping too. This means banks will now pocket even more profits than ever, while continuing to refuse to lower rates to borrowers.
  • eth3l, on 03/17/2008, -2/+1How many here remember the 70's?

    Our economy is not the greatest right now, but its no where near as bad as the 70's. Despite the massiv eincrease in petrol demand from China and India (why prices are high) at least you can still get it. Anyone here try to buy a house with a loan carrying 17% interest? dont think so - first house in 1980: $99,000 - 17% interest. Today, I pay 8% and I can get gas, no matter the cost, whenever the hell I want.
    • Xios117, on 03/17/2008, -0/+1The dollar wasn't in danger of collapsing in the 70's.
      There was a shortage of gas because it wasn't physically there, not because people couldn't afford it.
      Please fail less at metaphors.
  • Look4Truth, on 03/19/2008, -0/+2Get out while the markets rally. There will be more bank closures soon so don't get caught.
  • aunjar, on 03/22/2008, -0/+2While everything before me that has been said may very well be true, we all need this economy to get better. What affects some people will eventually affect all people if not corrected...
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