patrick.net

ARRRGHHH. They cut the interest rate by .5%

Stock market soars.

AARRGHHH.

I spent most of yesterday and this morning selling off my positions in expectation of the .25% cut and resulting plummet.

ARRRRGHHH.

I can't believe they cut 50 bp's! Look at the dollar go!

Bork,

From what I understand, that's true. It's an old technology that's been dusted off and re-worked but the Reuters article said it is "a conventional bomb with a strength similar to a nuclear blast".

The one we "dusted off" in 2003 was nick-named "The Mother of all Bombs". From the footage I've seen it doesn't appear to have any kind of tracking or guidance device whatsoever? Just gravity... and wherever it happens to land. If the blast effect is what they're saying it is, I guess, how "accurate" does it need to be?

So how much lower will online banks pay that are now paying 5% APY? Any guesses??

For any on this web site that actually ARE an FB or know an FB - tell them to refinance as soon as ANY downward motion occurs in the 30 year fixed. I know they have been diverging (the Fed funds rate and 30 year fixed rates) but this is just too big a move for lending institutions to miss. There was already a lot of liquidity and getting mortgages and holding (not just being mortgage servicers) will be the new order of the day. This will be a brief window in wich people can refi or (possibly) sell. Starting next year, plan for crazy inflation followed by a stern Fed.
How about some prognosticating?
End of 2007: Rate wiil be 4.5% (doing .5% early obviates the need for .75% total)
End of 2008: Rate will be 6%, recession will be declared and will be a huge plank in any candidates presidential election bid. Just by sheer number of people affected the housing crisis will drop out of the media in favor of the stagnant wages, high cost of goods (especially energy), and job loss old saws.
End of 2009 Rate will be 8% and world recession will be firmly announced.
End of 2010 Rate will be 11% Peple will begin to clamor for war against Iran due to high energy costs.
End of 2011 Rate will be 13% By now the Countrywides and other banks that were able to put off bankruptcy earlier will start failing like mad. The magnitude of the "it was just like the S&L cirsis" will be shocking. Talk of socializing medicine will get killed as the years-now-gone argument of "we are too rich a nation to not insure everyone's health" will be replaced by people clamoring for work.
End of 2012 Housing will trough. Expect discount of 35-50% off peak value taking peak to be Summer of '06. By now, with any luck, the US will have moved away from the auto industry as the backbone for our labor force (and advertising dollar), and trains and buses will carry far, far more people as gas has risen to over $5 a gallon. Gas costs and alternative energy should allow for a net export trade balance for the first time in how long?
End of 2013 By now, things may have become so bad that congress may even have the political will to tackle the entitlement problems. Medicare and social security benefits will change: retirement age will be raised, payout rates will be cut, taxes will be raised.

Phew - hows that spin based on Mr Bernanke's rate cut?

DinOR,

A Tu-95 "Bear" can carry at most a 30 ton payload. Even a small atomic weapon has a yield of at least a THOUSAND tons of TNT. I wonder what explosive they use that could so much more powerful than TNT.

About that Tu-95. We could feel the vibration from those contaprops if we flew within 2 miles of that thing. It must have been hell on the crew. Also. that plane carried defensive missiles operated by a dedicated crewmember that could outrange anything carried by an F-16. That is, an F-16 sent to intercept would be detected and fired upon before the F-16 was in range to fire its own missiles.

"my mom will be there with a beer in each hand."

San Miguel's, no doubt.

Headset, even your great Conservative icon Pat Buchanon has stated that the US LOST WW2 and that Europe was lost to the Communists. Look at an up-to-date map today. Count all those countries that were under Communist dictatorships. After Germany carved up 25 million of the Red Army, I think Russia said "Enough with our global domination plans". The great General Patton realized this earlier than most.

"San Miguel's, no doubt"

From your mouth to God's ears!

I just think it's silly to not have posted in weeks and then suddenly appear within minutes of the "announced" rate cut. Was anyone really that surprised? What under water Real Estate Partiers don't understand is this is the Fed saying; "We GAVE you your much awaited rate cut, and it didn't help. Will you please crawl back under your rock".

DinOr,

Reuters information is, to put it mildly, incorrect, unless by "similar" they meant "hundreds and thousands times weaker".

Yes, it's a drop-bomb (with parachute) in its current configuration and it's very heavy (7.8 tons of explosives). I can't see how this thing can be useful in a modern warfare when you rely either on high-precision ammunition or bunker busters or (theoretically) nukes which yield much more explosive power, are much lighter and can be mounted on high range rockets etc. So there, except for the fact that Russia can brag that this bomb is "the most powerful conventional bomb ever made" there is not much use for it. Just to remind you, its US equivalent (MOAB) was never used in Iraq because there are no real targets for it.

All you need is sperms.

http://www.marketwatch.com/news/story/house-approves-bill-aiding-mortgage/story.aspx?guid=%7B2506D0AC%2D08AF%2D4C14%2D96FA%2D1433C9AE25BD%7D&dist=hplatest

House approves bill aiding mortgage borrowers

If men realize that it's not necessary that they leave offsprings behind, there will be fewer conflicts on this planet. That one must leave his genes behind is part biological and part social conditioning. After all, most people's lives aren't that great. To bring children to this world without giving them sufficient privileges and wise guidance is in my opinion utterly pointless.

DinOR Says:
had you heard about the Russian’s new “suck bomb”? I’m told it’s as potent as a nuke but is completely conventional.

It is a fuel bomb with an force equivalent of 44kt, like the 11kt MOAB but bigger. The US announced we have 'a bigger bomb' (not kidding, that is what the US military said) that goes to 14kt.

The 'are you effing kidding me' spin on this was that these are "environmentally friendly bombs" because they have no radiation, no chemical- and no bio-contamination. They just vaporize every living thing in the 300-400 meter blast radius and cause deafness for 4 miles. [sarcasm]But other than that, they are just great for the environment. [/sarcasm]

SP

Just goes to show how the influential money elite own this country. They can manipulate to the highest levels of monetary decision makers. It's unfortunate that we live in such a society. But at the end of the day the common working citizen has no power or protection. What they've realized is that without the consumer holding up this fake consumption economy we'll be in a recession within six months. It's not a fix it's prolonging a far worse scenario down the road.

Morally it's a big F" You to other than the wealthiest investor who've lost millions in this credit contraction. I'm disgusted with the working of this countries financial and political power brokers. The message : Save the wealthy banks, hedge funds, and Country Wide's . The whole system is so corrupt.

Well... Looks like Bernanke is saying "Recession is in the bag" right now.

Ugh, what do I do with my savings??? I'm so depressed...

"Ugh, what do I do with my savings???"

Nothing...I think a lot of people are overreacting to this cut...it's not like the funds rate was reduced to 2003 levels (1%)...it's simply back where it was in early 2006.

Good point. But I'm still depressed...

It's a good question though - what should one do if he or she has a big stack of cash from selling of 85% of his/her positions over the weekend?

Ibonds?

Gold futures at $735/oz.
Oil at %81.50/barrel.
Fed Funds Rate dropped 50bp to 4.75%.
Looking forward to a decade or more of inflation: PRICELESS.

Well, it's official. Bernanke is a spineless fucker. He can comfort himself with the realization that he will be remembered as the Fed chairman who will likely have brought about perhaps the worst bout of inflation this country has ever seen.

Bork,

When I was... in the service I was *not an ordinance specialist. I was an avionics guy. I agree, I think the value of such a weapon is questionable at best. Your enemy would need to have an AIR FORCE! for it to be worthwhile. Just imagine dropping that thing on an airfield as fuel, weapons, liquid oxygen/nitrogen "get in the mix". Now THAT would be pyro's wet dream!

"Don't you worry none young captain, we'll have this place cleaned up for you in a jiffy"

sfbubblebuyer,

Was that a play on Gary "15% is in the bag" Watts?

“my mom will be there with a beer in each hand.”

Only the beer will be much more expensive!

We GAVE you your much awaited rate cut, and it didn't help. Will you please crawl back under your rock.

DinOR, that idea occurred to me. Then I dismissed it as rationalizing. Then you posted, and I feel a bit better. Am I grasping at straws?

To those who are depressed/saddened/angered by the rate cut.

This was as expected. Look up the history of fed funds futures. It's predictive precision is impressive. The downplaying of inflation fears was signaled in the last Fed meeting. The discount window was cut recently. Barry Ritholtz puts it very eloquently - The Fed has become Wall Street's b1tch.

There was enough time - almost a year to adjust to the eventual rate cut. Buying commodity stocks, international stocks and foreign currency bonds or even SP500 index fund was always an option.

There was never a doubt that the policymakers don't give a sh1t about savers. I wish it could be different. But it ain't. And it won't be. So protect yourself. They are at least clear about their intentions. Heed to those warnings.

Bruce,

I don't happen to think so. NAHB survey shows a 22 year low in builder sentiment, the delinquent payments (and subsequent defaults) are just starting, there's more unsold inventory than you can shake a stick at and lenders are STILL going under.

I don't think a half a point is going to fix all that, and the Fed knows it. This is appeasement at best. BB is still straddling the issue (believe it or not) and we'll reach a point where saving our currency becomes the #1 priority. Then it'll be; "I'd do something for you REIC guys if I could, really I would but I dropped a half point and it didn't help. Right now I've got other fires to put out".

"This was as expected." Indeed.

I'm only talking about my down payment savings, not my entire portfolio.

eburbed,

Get thee to inflation hedges. Being in manufacturing I can say that from the perspective of main street, currency valuations respond quicker than demand for commodities. i.e. A purchasing manager needs to experience a heart attack over the price of aluminum required to fulfill current orders before corporate really starts thinking about the problem. And so it goes on down the line with a 2 to 8 week latency at each step.

Also, move that cash into something other than dollars. That is, unless you want to play the short game here in town. Wall street liked the look of todays fresh band-aid from Dr. Ben but that doesn't do anything for the ulcer underneath.

Bernanke: I'll huff and I'll puff and I'll blow your currency down!

Late summer brought no relief from soaring foreclosures. The number of homes in some stage of default jumped 36 percent month-over-month in August, according to a regular monthly survey.
Delinquencies and defaults more than doubled year over year to 243,947, according to August figures released Tuesday by RealtyTrac, a marketer of foreclosed properties. RealtyTrac's forecast is for total foreclosure filings to exceed 2 million this year.

with this kind of stuff going on, it's no surprise what the fed did. that too when ARM's reset is in initial stage. what i didn't like was the drama Ben & Co put up about inflation and suddenly took a 180 turn. should do a lot of good to his reputation.

Actually, the rate cut today doesn't me squat in the long term. The long term supply/demand fundamentals have been, and will continue to be f#@ked for a while to come.

ColoradoBear,

You bring up some good points. Perhaps it's time we revisit some of the "bunker" strategies we had discussed in the past but were premature. It's not that we were wrong, just early.

If men realize that it’s not necessary that they leave offsprings behind, there will be fewer conflicts on this planet. That one must leave his genes behind is part biological and part social conditioning. After all, most people’s lives aren’t that great. To bring children to this world without giving them sufficient privileges and wise guidance is in my opinion utterly pointless.

GC, well said!

1 Canadian dollar = 0.972006 U.S. dollars

Sheesh, just when I was planning a foliage viewing trip to Canada...I'm cursed.

Sheesh, just when I was planning a foliage viewing trip to Canada…I’m cursed.

You can praise our fine Fed chairman.

Bernake is this generations FDR.

Bernake is this generations FDR.

That would be Hilary Clinton.

"It is a fuel bomb with an force equivalent of 44kt, like the 11kt MOAB but bigger. The US announced we have ‘a bigger bomb’ (not kidding, that is what the US military said) that goes to 14kt."

Sp, are you confusing kiloTONS with kiloPOUNDS?

You are saying that a MOAB that ways less than 10 tons packs the wallop of 14,000 tons of TNT. What explosive is 1,400 times stonger than TNT?

What's this generation's polio? (Yes, I know that FDR probably did not have polio but...)