Cripes. The Fed is heading for zero

[charlie]

Well, this is it, the last bullet in the chamber. Didn't work for the Japanese, probably won't do much for us.

The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

...

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco. The Board also established interest rates on required and excess reserve balances of 1/4 percent.

http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm

[Phred42]

1. It's time we simply bought the Fed back and fires those assholes

[BzaDem]

3. I'm actually quite happy the Fed is making these decisions and not you.

If the Fed weren't lowering interet rates and printing more money to avoid crippling deflation, now that might be cause for concern. But because the Fed is doing what most pragmatic economists are calling for, I'm not worried. :)

[Phred42]

20. Yeah - Thank God a private for profit Coropration controlled by republicans controls our money

and our Inflation - and can give away our tax dollars with no oversight form elected officials

Yep - Thank god for Greenspan huh?

Yeah - where would we be if we hadn't had this Private Corporate controlling all of this

[dysfunctional press]

2. i'm holding out for -1%...

when they start paying people to borrow money.

[DJ13]

4. In other news impotent guy fires blanks .........

[hedgehog]

5. Hmmm, yet I'm still paying 8.5% for student loans and 29.99% for credit cards....

[SOS]

11. Hedgehog

Have you called the loan sharks charging you 29.99%?
If not, give it a try. The banks seem to be more willing to bend a little.
Perhaps due to the anger and bad publicity coming their way these days.
We called our credit card loan sharks today and got our 26.99% usury rate lowered to 6.9% and I managed to get an $800 refund!
It's worth a try, if you haven't already.

[hedgehog]

13. I'll think about it. I just have to wonder if it'll give me a black mark

somewhere that'll make getting credit harder down the line.

[tritsofme]

14. If you don't have any late payments in the last 6 months

tell them that unless they lower your APR significantly you will transfer the balance to a low interest credit card and never do business with them again.

That usually gets them moving.

[SOS]

18. Don't worry

You're only requesting a drop in the interest rate.
It helps to have a little ammo to bargain with, such as a home equity line, a private loan or a transfer of the balance to another card.
Just let them know that 29% is unacceptable and they must either lower the rate or you will leave.
Might have to exaggerate your options a bit, but all's fair in modern American banking.
Just asking them (along with a touch of brinksmanship) won't hurt your credit score and it could save you some real money each month.
Good luck!

[sarcasmo]

16. Canceled two cards that wouldn't drop my rate form that loan shark rate of 29.99%.

[Deja Q]

6. I've got good credit. If I went out and got a car loan, would that work in my favor?

[Warpy]

7. Got a good dead cat bounce for the market

which means we'll see a few more spectacular falls before Stupid is gone.

The problem is that the second shoe of bad mortgages is about ready to drop, all the fraudulent loans that were extended in 2006 to try to keep the housing bubble pumped up.

Nobody knows quite yet how bad it's going to be, but there's no way any small part of the economy will improve until the disaster is over.

There's no way the economy as a whole is going to improve until people are back at work at wages they can live on.

[RC]

9. The only way the economy is going to improve is to get our jobs back that have been outsourced.

Bring back the machines that were shipped over seas when the jobs were outsourced.

Install less greedy and more reality grounded CEO's and Corporate Boards.

Rescind person hood for corporations.

[Warpy]

10. Most of those jobs are gone forever

because the infrastructure has also been either offshored or sold for scrap.

The new industrial base should produce and be powered by renewable energy and protected by tariff.

Nothing else will work.

A few office jobs should come back, particularly in extremely sensitive areas like health and finance. Their return should be mandated by US privacy law.

Old smokestack industry is gone. It's not coming back.

[RC]

17. It it doesn't come back we never will recover.

This country can not sustain itself on service industries. That is what it is trying to do now. Service industries do not and never have paid well.

[Warpy]

19. There is a huge difference

between the reimportation of smokestack industry and the development of clean industry. I suggested the latter, along with tariffs to keep it here.

[RC]

21. So you are telling us that cottage industries is the answer to recovery?

[Warpy]

22. No, that's your strawman.

RTDP

[RC]

23. Ok, then who is supposed to have the smoke stack industries that

makes the aluminum, iron/steel, copper, zink, raw plastics, etc? Keep letting China do it?

[Cessna Invesco Palin]

26. Tariffs are not magical fairy dust.

Increasing tariffs is not going to magically spawn new industries. If I'm an investor, am I going to invest in an aluminum production facility whose existence is solely dependent upon a government trade policy that could change at any time, for any reason? That sounds like a very risky bet, especially considering the massive initial investment for infrastructure. What if the tariff is overturned halfway through completion of the facility? Too risky for me, and too risky for most careful investors.

Keep letting China do it?

This may come as a surprise, but China doesn't need our permission to build new industries, and we are far from their only trading partner. Any attempt to damage Chinese industry would be met with reciprocal measures aimed at damaging ours to the point where we would have no choice but to relax our tariffs. This is yet another reason I'd be extremely hesitant to invest in an American aluminum smelting operation.

You ask who is "supposed" to have the smoke stack industries. Well, generally speaking economic activity occurs in the place where it makes the most economic sense. For a smoke stack industry, that primarily comes down to labor costs and availability/cost of raw materials. Leaving aside the materials concerns and focusing solely on labor for a moment, it's fairly easy to understand why basing your economy around unskilled or semi-skilled labor (which is the primary employee base for smoke stack industries) is a bad idea if your labor costs are high. This is why you don't see any western democracies basing their economy on unskilled labor any more. It's not just us, and I don't see how or why we should be any different.

[RC]

27. I think you missed out on something somewhere.

Or maybe you got all your education from books. Smoke stack industries doesn't necessarily mean semi or unskilled jobs. A lot of high wage, highly skilled jobs went over seas with the demise of our steel industry. To say nothing about the supporting industries that went down the tubes when basic industries got off shored to China and else where.

[CatholicEdHead]

15. More shoes after that

The shoes could be falling until 2010 or 2011.

[lpbk2713]

8. I just don't understand it.

It wasn't that long ago when Limbaugh and Hannity and the other RW Lying Hatemongers were
telling us how great the BushCo economy is doing. Oh, but wait... That was before the election.

[Odin2005]

12. I hard on NPR that they are gonna try to manipulate mortgage rates lower.

Sounds good to me.

[SoCalDem]

24. Shit... Our CDs will be making bupkis when they renew

:(

[ProfessorGAC]

25. Oh Good. More Overcontrol

You would think that with 20 years in a row of data showing nearly zero correlation between the Fed's rate adjustment actions and macroeconomic behavior, we'd quit fiddling with the wrong knob!
GAC