Posts filed under “Credit”
Today’s absurdity was this rumor circulating that the Fed was arranging a secret meeting.
Than the rumor came that they were going to cut next week.
But my favorite rumor du jour was passed along by the WSJ: You see, according to some of the more cleverer
Horse Central bank Whisperers out there, the FED HAS ALREADY CUT RATES.
"The Fed’s primary weapon is its influence over the
federal-funds interest rate, at which banks with excess reserves lend
to banks that are short reserves. When demand soared last week and the
market interest rate rose above the target, the Fed pumped in extra
cash. But in times of turmoil, it can be difficult for the Federal
Reserve Bank of New York to fine-tune its interventions. In recent
days, the rate has traded well below the Fed’s target at some points of
the day — even coming close to zero at times. That has prompted some
in the markets to deem this "a stealth Fed easing."
That was the reason given for the comeback today. Not that we had sold down 1,500 Dow points in less than a month, but (shhhhh!) whisper after me: "Fed cut."
Stealth cut, or absurd rumor?
What say ye?
Update: August 17, 2007 9:38am
Has the Fed Secretly Cut U.S. Interest Rates?
Markets Wonder As Federal-Funds Rate Lingers Below Target
DAVID WESSEL in Washington, LAURENCE NORMAN in New York, ENDA CURRAN in Sydney and MICHAEL S. ARNOLD in Tokyo
WSJ, August 16, 2007 2:25 p.m.
To be filed under "Better-Late-Than-Never" regulatory actions: The Federal Reserve is considering the following changes in Sub-Prime lending disclosures:
The federal financial regulatory agencies today issued proposed illustrations
of consumer information for certain adjustable-rate mortgage (ARM) products
described in the agencies’ Statement on Subprime Mortgage Lending (Subprime
Statement), effective July 10, 2007. The Subprime Statement recommends
communications that ensure consumers have clear, balanced, and timely
information about the relative benefits and risks of certain ARM products. The
illustrations are intended to assist institutions in providing this information.
(Below is a table of the proposed changes)
So is this a case of too-little-too-late, or might this actually accomplish something positive?
What say ye?
The rest of the proposed changes are after the jump . . .