Interest Rates Slashed Worldwide

Federal Reserve Cuts Key U.S. Rate By Half A Point In Joint Effort With Central Banks

(CBS/ AP)  In a rare coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to prevent a mushrooming financial crisis from becoming a global economic meltdown.

The Fed reduced its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England cut its rate by half a point to 4.5 percent and the European Central Bank sliced its rate by half a point to 3.75 percent.

The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.

"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves meant to pry open tight lending and revive the global economy.

The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.

White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.

The country's presidential contenders also embraced the action. "This is a global crisis that requires a global solution," said Democrat Barack Obama. Republican rival John McCain hoped it would contain the "financial crisis spreading across the globe."

As investors pondered the implications of the orchestrated rate cuts, stocks on Wall Street initially opened lower. By midmorning, however, the Dow Jones industrials were seesawing.

Some analysts were skeptical that the coordinated rate reductions would do much to turn things around.

"At first blush, while this is a big step, it is unlikely to prove sufficient to stem the rot. Additional rate cuts are likely and further measures to inject liquidity and re-capitalize banks are needed," said Marc Chandler, global head of currency strategy at the investment firm Brown Brothers Harriman.

The rate cuts came against a backdrop of increasing anxiety in global financial markets. Investors have been fleeing shares on worries that neither the Fed, nor other central banks, could move fast enough to stop the rising turmoil.

The International Monetary Fund, in a World Economic Outlook released Wednesday, slashed growth projections for the global economy and predicted the United States will continue to lose traction.

"The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said in its report.

European indexes, which were down about 5 percent before the rate cut, pared only some of their losses. In Britain, the FTSE-100 fell 4.24 percent, Germany's DAX dropped 4.98 percent, and France's CAC-40 dropped 4.58 percent.

In Asia, Japan's Nikkei 225 closed 9.38 percent lower and Hong Kong's Hang Seng tumbled 8.17 percent hours before the rate cuts were announced; their declines showed the extent of the worldwide gloom.

The Fed's action Wednesday was the latest in a long series of moves over the last several weeks that the central bank has taken in coordination with other federal agencies, Congress and the White House to shore up a financial industry stung by bad loans, mounting losses and - in many cases - collapse. President George W. Bush signed a $700 billion financial bailout bill into law on Friday.

The Fed's action reversed its current policy on interest rates, which had been to hold them steady out of concern that more cuts would fuel inflation. Since Fed Chairman Ben Bernanke and his colleagues put a stop to interest-rate cuts in June, economic and financial conditions have deteriorated significantly.

"The pace of economic activity has slowed markedly in recent months," the Fed said. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."

On Tuesday, Bernanke said the Fed will "need to consider" whether its current stance of holding rates steady "remains appropriate" given the fallout from the worst financial crisis in decades.

"The outlook for economic growth has worsened," Bernanke said in remarks Tuesday to the annual meeting of the National Association for Business Economics.

Although inflation has been high, the Fed believes the recent drop in energy prices and the weaker prospects for economic activity have reduced this threat to the economy.

In addition, the Fed reduced its emergency lending rate to banks by half a percentage point to 1.75 percent. Given the intense credit crisis, banks have been ramping up their borrowing from the Fed's emergency "discount" window.

The fact that the Fed felt it couldn't wait until its regularly scheduled meeting on Oct. 28-29, underscored the urgency of the situation.

One of the goals of the coordinated rate cuts is to spur nervous consumers and businesses to spend more freely again. They clamped down as housing, credit and financial problems intensified last month, throwing Wall Street into chaos. Many believe the United States is on the brink of, or already in, its first recession since 2001, one that could quickly spread to other countries around the globe.

Even with the unprecedented $700 billion financial bailout plan, the failing economy and the jobs market probably will get worse. Many believe the economy will jolt into reverse later this year - if it hasn't already- and will stay sickly well into next year.

One of the most crucial pillars of the economy - the jobs market - has cracked, and wage growth is slowing. This means that consumers will be even more hard-pressed to spend in the fashion that helps grow the economy.

Increasingly skittish employers slashed payrolls by 159,000 in September, the most in more than five years. A staggering 760,000 jobs have disappeared so far this year. The unemployment rate is 6.1 percent, up sharply from 4.7 percent a year ago.

The U.S. unemployment rate could hit 7 or 7.5 percent by late 2009. If that happens, it would mark the highest rate of joblessness since the months immediately following the 1990-91 recession. Some economists say the jobless rate could rise even more before the situation starts to get better.

Mounting job losses, shrinking paychecks, shriveling nest eggs and rising foreclosures all have weighed heavily on American voters, who will be electing a new president in about four weeks. The economy is their No. 1 concern, polls have shown.

[u-r-right]

Wow! The feds actual rose from their golden beds a bit early this morning. Too bad this move only helps the fat cats in the banking industry. I have yet to see these lower rates "trickle down" to help us common folk. Meanwhile, the dollar will sink to new lows here in a day or two.

[lewiston14]

A whole .5
I feel better allready

[ajaxtheleast]

This isn''t energy prices conveniently and

without control somehow dropping.

This is energy "gouging", prices in real

fear, being reduced.

If we end up at 30 dollars a barrel and
the economy recovers and goes on from
there at 30 dollars a barrel a bunch of
people should be sent up.

With Bush leading the parade

[grandesign]

I''m a contrarian. I am looking for a safe place to put money, and I would like to see the issuance of government bonds with higher interest rates. I realize the central bank has to increase liquidity to keep credit markets greased, but I am holding way to much cash. Is there anything as safe as a government bond? Just, the current interest rates, when adjusted for inflation, doesn''t offer much of an opportunity. Where is everyone else putting their cash? You know they pulled them out of the equities market and the banks.

[sfbanak]

Hey, it''s better than complaining and being sarcastic. What are you doing? I''ve seen it decrease some credit card rates before and mortgage rates. We all need to see what we can do, too. What goes up eventually comes down; what goes down, eventually comes up again. Do something positive and stop complaining.

What took them so long? This won''t save McCain and that airhead Palin.

[sfbanak]

What and have someone steal it????? Bury it in your backyard like people did before. Put it in the walls of your house. If it devalues, it will be just paper anyways--then, you can use it for fertilizer.

PANIC is our enemy. People pulling out are making things worse. We gamble on the stock market. We''re all fine as long as things are going our way. But, when they''re not, some surrrender; some fight the battle.

[myopinion1]

Why is it necessary to show another financial worker with their head in their hands every day? Is it that there are no photographs available of the AIG or Lehman executives lounging at the country club or on their yacht? I spit on that scum.

[debbiemack-2009]

Wall Street Journal Map this morning shows states with most devaluation of homes. Guess whose state leads the pack, Californication! With 85% devaluation, the State that put Nancy Pelosi,and Barbara Boxer in congress and the state of delusionial Hollywoodcrats like Jane Fonda.
No wonder Nancy emerged with a big smile after she pushed through the bail out. Her state, is on the brink of failure.

[debbiemack-2009]

Posted by SFBANAK at 08:04 AM : Oct 08, 2008

Decrease Credit card rates??? Are you nuts. Low credit is what got us in this mess in the first place.!!! You should be put in jail for making such a stupid statement.

[debbiemack-2009]

Obama insults the integrity of every thinking american. He is telling you the government knows how best to spend us out of this mess. Well it was the government that spent us into it and now he expects congress is wise enough to guide us out of it. This is what MCCain means when he says Obama lacks the ability to exercise of good judgement.

[debbiemack-2009]

Posted by Grandesign at 08:04 AM : Oct 08, 2008
Well history tells us that the best thing to do is invest for the long haul. Panic drives the ignorant and the poor. The rich look at solid american companies and are buying them up NOW. In five years they will have tripled their money and the ignorant and the poor will still betrying to pay off mortgages they stil can not afford. I am not rich and could not afford to pay the high prices of 8 months ago but now I am buying.

[debbiemack-2009]

WHO WILL BALANCE THE BUDGET ? JOHN MC CAIN VOTED 90% OF THE TIME WITH GEORGE BUSH.

Posted by tonic16612 at 08:12 AM : Oct 08, 200

90 % of the time he was right. It was the other 10 percent of the time when Clinton, Dodd, Pelosi and Obama voted for Fanny and Freddy that got is into trouble. Obama never did respond to the statement he was second highest on the take when it came to Fanny and Freddy campaign contributions. Under the table funds, from Ayers will never be traced.

[antoniof123]

Posted by Debbiemack at 08:58 AM : Oct 08, 2008

You are the insult not Obama but you and people like you. You spouting that nonsense as though it is facts.

Let me give you the facts about Bill Clinton:

http://www.whitehouse.gov/history/presidents/bc42.html

During the administration of William Jefferson Clinton, the U.S. enjoyed more peace and economic well being than at any time in its history. He was the first Democratic president since Franklin D. Roosevelt to win a second term. He could point to the lowest unemployment rate in modern times, the lowest inflation in 30 years, the highest home ownership in the country''s history, dropping crime rates in many places, and reduced welfare rolls. He proposed the first balanced budget in decades and achieved a budget surplus. As part of a plan to celebrate the millennium in 2000, Clinton called for a great national initiative to end racial discrimination.

Now go sit in the corner and be quite it is time for the adults to talk.

[easeup-2009]

Posted by antoniof123 at 09:03 AM : Oct 08, 2008

You left out:
Recession
Tech bubble
NAFTA
Eliminating trade barriers with China
Lying under oath

[gop_will_win]

The interest rate cut has worked! The DOW is down 200 points now. Its all Obamas fault.

[formrusmcsgt]

I wonder if the folks who voted for Bush but now have to postpone their retirement because of massive retirement account losses still think they made the right choice.......

[interobserv]

Obama insults the integrity of every thinking american. He is telling you the government knows how best to spend us out of this mess. Well it was the government that spent us into it and now he expects congress is wise enough to guide us out of it. This is what MCCain means when he says Obama lacks the ability to exercise of good judgement.


--------------------------------------------------------------------------------

Posted by Debbiemack at 08:50 AM : Oct 08, 2008

No. I''m sorry. But your assessment is incorrect. Deregulation has left our economy in a shambles. Big business cares only for Big Business. It has no conscience. The mere fact that AIG execs took my money and went to an exclusive resort is testimony to that. Giving more to the rich will only make them richer and the porr porrer. You sound like the poster girl for Arthur Laffer and his curves.

Now sit down, shut up and let those of us who have a clue fix the mess you and your buddies have gotten us into.

[easeup-2009]

I wonder if the folks who voted for Bush but now have to postpone their retirement because of massive retirement account losses still think they made the right choice.......

Posted by formrusmcsgt at 09:17 AM : Oct 08, 2008

Most of them are smart enough not to blame the President for everything.

[tool105]

Anybody know when we are suppose to start with the rape and pillage part?

[usclimey]

Just want to remind everyone (especially our new GOP troll DebbieMack) that the Republican''s grand plan was to invest Social Security in the Stock Market. How much of a disaster would that have been? Mc.Cain voted with the pres on that one as well.

[Renegade.Rivers]

The .5% drop in the interest rates from the Fed to the banks was like someone throwing a cup of water on a house fire. On top of that, it devalues the dollar against foreign currencies. If the United States had a manufacturing base this might be a better choice, because then there would be a possibility for increased exports, but since the United States is now a service oriented economy the devaluation means that the cost of products from overseas will cost more.

This is also a case where the Fed has once again stepped in to prop up a falling market, and ever time that they have done it previously, it caused a bump in the markets, but once the bump was over, the market began to fall again, and fell even lower as the days passed. If the markets rise today it will be a moderate rise, and then they will start falling again. The bottom of this fall is still several months away, and the bottom has not been reached yet.

This also tends to give people little shelter from all of the downward spiral because it will also take the earning from Treasuries down, due to a decrease in interest and the devaluation of the dollar.

There has been a huge sell off in the first twenty minutes of trading, and their will be some bargain buying throughout the day, but the down spiral is still not over.

[easeup-2009]

Just want to remind everyone (especially our new GOP troll DebbieMack) that the Republican''''s grand plan was to invest Social Security in the Stock Market. How much of a disaster would that have been? Mc.Cain voted with the pres on that one as well.

Posted by usclimey at 09:50 AM : Oct 08, 2008

Clinton did too--nice try. In fact, Clinton wanted to invest the whole enchilada into the market.

[easeup-2009]

DOW is starting to go up...

[getreeltex]

In just 8 short years Republicans have done what no terrorist ever could.


They''ve bankrupted the country and brought the economy to it''s knees.

What do you guys do for an encore?

Oh that''s right, you send us John McSame.

Thanks but no thanks!

[babooph]

The endless war ,funded by owing China, with the massive tax cut for the rich has been just wonderful-the world enjoys watching the US self destruct economically,morally & militarily-GOD spoke to Bush-he must hate the US!

[lewiston14]

"Trading on both Russian stock markets was suspended - on one until Friday and the other until further notice." CBS news

What is the down side of suspending markets?

[Renegade.Rivers]

The down is now down -50, which means it has dropped another 185 points if the high is included. Oops, its now down -71. What a recovery!!!

[whitemale08]

HEY BERNANKE....PAULSON!!!!

YOU CAN''T PRINT YOUR WAY OUT OF THIS MESS!!!!!

SHUT DOWN THE PRINTING PRESSES AND BRING THE FEDERAL RESERVE SYSTEM INTO CONSERVATORHIP BY CONGRESS NOW!!!!!!!!!!!!

[Renegade.Rivers]

DOW is starting to go up...

Posted by easeup

I don''t want to laugh, as I am sure that you really were hopefull but the fact is that the Dow is now down over -150. This bleeding isn''t going to stop anytime soon. Everything that has been done is no more than putting a bandage on a sucking wound. The sucking wound is our economy, and its in the toilet. I have been saying for days that the bottom would be below 9K and would be 7-8K.

[vancouverboo]

Down, Down, Down she goes, Where she stops, nobody knows. Nice work guys. It''s only down about 200 so far this morning. Thank goodness the same guys who were in control while all this was brewing are still in control today. Except for Alan Greenspan. How''s the financial consulting business going, Alan? Probably fine. All the rich bankers, brokers and businessmen are giving him pay-offs in the form of consultants fees. That''s the legal way to do it.

[graced3]

When will it stop?!?
Don''t point the finger of blame now.
Fix the problem.
Get control of the Stock Market.
Will we ever be able to retire?

[lewiston14]

Might as well laugh about it as there is nothing we can do about it.

And on november 4 nothing is going to change either.

[lewiston14]

Maybe the next time the G8 meets thay can pull some flowers out of their nose.

[antoniof123]

There are no bargins out there stay away from the market it is heading down and may break 9,000 today on the way down.

Thank you GOP for your wonderful lack of controls deregulators at there best.

[gce65]

So US interest rates are now at 1.5%. They''re still charging us to borrow.
Maybe the Fed and banks should start PAYING US 1.5% or 2% to borrow their money!

[gce65]

Dow, Nasdaq and S&P keep sinking.
Maybe they''re listening to Johnny Cash:

I fell into a burning ring of fire
I went down down, down
The flames went higher

And it burns, burns, burns
The ring of fire
The ring of fire

[indianmade1]

I don''t see how lending rates begin down is suppose to help. If you have already filed bankruptsy and cleaned out your savings, you can borrow any more or invest in anything. It''s too little to late. People can''t afford to spend more and especially borrow more. borrowing money is how the average family got into the mess were are in.

[riddelup]

I once read an account of the plague during the middle ages. It stated the aristocracy and royalty were not devastated by the plague as was the general population. The reason stated was the aristocracy would move to their country estates and use whatever was the government at the time to prevent access. They were not effected by whatever plague was afflicting the general public by removing themselves in time of stress with the aide of the government. Does this sound familiar to anyone?

[upto1947]

Soom people have about as much sents as a Jack A66. The things that are said on this site, the Post A Comment, show why the United States is in trouble. The people running the US come from the same group of IDIOTs that are on here. Not one of you could run are take care of a dog house. What some say is sick. All it does is show how little you know about things. It is better to keep your mouth shut and let peopel think you are an idiot, then to open it, and show that you are an idiot.

[slim1h2o]

Soom people have about as much sents as a Jack A66. The things that are said on this site, the Post A Comment, show why the United States is in trouble. The people running the US come from the same group of IDIOTs that are on here. Not one of you could run are take care of a dog house. What some say is sick. All it does is show how little you know about things. It is better to keep your mouth shut and let peopel think you are an idiot, then to open it, and show that you are an idiot.


--------------------------------------------------------------------------------

Posted by Upto1947 at 12:22 PM : Oct 08, 2008

English as your 2nd language?

Learn some grammar will ya.

[t_barr]

www.infowars.com/audiobox.html

[swwils]

The FED,and it''s rate cuts.We are going to owe so much money too the world it is going to be like the old day''s when you didn;t pay the loan shark.Obama,andMcCain are so out of touch they probably have an assistant pick out their toilet paper.When will everyone realize that the big Trillion dollar companoies run this world not elected officials.The last Prez, that we had that was a man was Hoover,after that the we''re all bribed or on the take anyway.These two yahoo''s are clueless.We have a crisis of Biblical proportions on our hands.The N.Korean''s are making a nuke,the Iranians are also.The Taliban are trying to get ahold of Pakistan,because they have roughly 50 or so.Next door India has about as many.Israel is sitting on 300 plus.We have 1000 plus,so does China.ussia has a few hundred.So the big discussion should be about world tactic''s against the bad guy''s.The economy will faulter but not collapse completely it will rebound,it always does we must tighten our belt''s a little.The new Puppet can only do what the Master''s tell them or face certain consequences.Face it this isn''t Grandma,and Grandpa''s days anymore.Money talks Bull S.H.I.T talks.

[antoniof123]

Interest Rates Slashed Worldwide

What it should say is we don''t have a clue as to what to do next so we will just try anything.

[inventagod2]

It''s a Correction, stupid...

[retter1]

check out the FED''s just issued report:
Shared National Credits Program1 Reports Large Increase in Credit Volume and Significant Deterioration in Credit Quality

Why the big boom in bad credit, $2 trillion to 5500 borrowers just last spring

[drinuk]

Ignore all this BS, forget it and get on with your life. Make Today Beautiful ! from Linda Eder''s new album The Other Side Of Me, available at B&N, sing and be happy and let the crooks destroy themselves.

[archiej2]

Possible Temporary Safety Net

For those of you who have IRAs outside your place of employment, I just want to share some information that I learned from Chase earlier this week. There is a 60 day window that you have to transfer money from IRA stocks that you sell into another IRA without incurring a penalty. Based on that information and as a result of present market conditions, I sold all my stocks that were in separate funds in my IRA. I will be truthful I did incur a loss. Nonetheless, as a result of the continuing downward spiral that I continue to witness in the market in spite of the fact that these individuals received the $850 billion that they''ve been crying for, I decided that the benefit of selling my IRA and leaving my money in an insured institution for 60 days to actually see where this market is headed in the next two months far outweighed the loss that I incurred. I guess what I''m trying to say here is the administration continues to say not to panic, however I feel that with the daily news filled with examples of corporate abuse, I''d rather sit tight for 60 days with cash in hand to really evaluate where the market is truly headed instead of losing my entire IRA.

[lastdance127]

Censored From ABC News :
Topic : Indictment in Palin Yahoo! E-Mail Hacking Case
Son of Tennessee State Legislator Faces Charges

Strange and odd
The Political-Criminal FBI Refuses to Retrieve E-mails
from Congressman who send S*e*x*ually
Graphic E-mails to Under Aged Children (Foley)

BUT ! !

The Political Criminal FBI out of an ACT of :
Political Nepotism - Patronization and Fraternization to :
The Bush NAZI Fascist Crime Regime
Tracked down These E-mails ! !
____

If your Comments have have been Censored from
ABC News Comments

Contact the : Civil Liberties Union
Ask for a CLASS ACTION LAWSUIT Against :
Brian Ross and The ABC News

Ask The Civil Liberties Union :
To Advertise For People Who Have Been Censored By
Brian Ross and ABC News
To Join in That Class Action Law Suit
http://www.aclu.org/contact/general : (Request Legal Assistance)

http://www.aclu.org/contact/general
Posted CBS News - Ruters (BBC) - MSNBC - FOX (Others)

[archiej2]

Possible Temporary Safety Net

For those of you who have IRAs outside your place of employment, I just want to share some information that I learned from Chase earlier this week. There is a 60 day window that you''re granted where you won''t incurr a penalty if you sell your present IRA and transfer that money into another bank''s IRA. Based on that information and as a result of present market conditions, I sold all my stocks that were in separate funds in my IRA. I will be truthful I did incur a loss. Nonetheless, as a result of the continuing downward spiral that I continue to witness in the market in spite of the fact that these individuals received the $850 billion that they''ve been crying for, I decided that the benefit of selling my IRA and leaving my money in an insured institution for 60 days to actually see where this market is headed in the next two months far outweighed the loss that I incurred. I guess what I''m trying to say here is the administration continues to say not to panic, however I feel that with the daily news filled with examples of corporate abuse, I''d rather sit tight for 60 days with cash in hand to really evaluate where the market is truly headed instead of losing my entire IRA.