75 basis point cut

[LA_Renter]

“What is the next asset bubble. I wanna know. :)”

Yea…….Me Too!

Bubbles are fun 🙂

[patientrenter]

Rich, that was a great analysis of the meaning and consequences of the Fed’s rate reduction. Thank you. You sound a little ticked at the readiness of the Fed to throw itself behind boosting markets, spending, and borrowing and lending, over boosting the dollar and saving.

I am puzzled by what happened in the currency markets today: The dollar appreciated against the yen, but depreciated against the euro and british pound. Any ideas, Piggingtons? I know that reducing US interest rates makes the higher-yielding euro and pound relatively more atractive vs the dollar, but why would they become more attractive against the yen? Surely the carry trade from yen into euro/pounds looks more risky now, with a greater chance of declining rates in Europe to keep up some with the Fed cuts.

Patient renter in OC

[patientrenter]

Rich, that was a great analysis of the meaning and consequences of the Fed’s rate reduction. Thank you. You sound a little ticked at the readiness of the Fed to throw itself behind boosting markets, spending, and borrowing and lending, over boosting the dollar and saving.

I am puzzled by what happened in the currency markets today: The dollar appreciated against the yen, but depreciated against the euro and british pound. Any ideas, Piggingtons? I know that reducing US interest rates makes the higher-yielding euro and pound relatively more atractive vs the dollar, but why would they become more attractive against the yen? Surely the carry trade from yen into euro/pounds looks more risky now, with a greater chance of declining rates in Europe to keep up some with the Fed cuts.

Patient renter in OC

[patientrenter]

Rich, that was a great analysis of the meaning and consequences of the Fed’s rate reduction. Thank you. You sound a little ticked at the readiness of the Fed to throw itself behind boosting markets, spending, and borrowing and lending, over boosting the dollar and saving.

I am puzzled by what happened in the currency markets today: The dollar appreciated against the yen, but depreciated against the euro and british pound. Any ideas, Piggingtons? I know that reducing US interest rates makes the higher-yielding euro and pound relatively more atractive vs the dollar, but why would they become more attractive against the yen? Surely the carry trade from yen into euro/pounds looks more risky now, with a greater chance of declining rates in Europe to keep up some with the Fed cuts.

Patient renter in OC

[patientrenter]

Rich, that was a great analysis of the meaning and consequences of the Fed’s rate reduction. Thank you. You sound a little ticked at the readiness of the Fed to throw itself behind boosting markets, spending, and borrowing and lending, over boosting the dollar and saving.

I am puzzled by what happened in the currency markets today: The dollar appreciated against the yen, but depreciated against the euro and british pound. Any ideas, Piggingtons? I know that reducing US interest rates makes the higher-yielding euro and pound relatively more atractive vs the dollar, but why would they become more attractive against the yen? Surely the carry trade from yen into euro/pounds looks more risky now, with a greater chance of declining rates in Europe to keep up some with the Fed cuts.

Patient renter in OC

[patientrenter]

Rich, that was a great analysis of the meaning and consequences of the Fed’s rate reduction. Thank you. You sound a little ticked at the readiness of the Fed to throw itself behind boosting markets, spending, and borrowing and lending, over boosting the dollar and saving.

I am puzzled by what happened in the currency markets today: The dollar appreciated against the yen, but depreciated against the euro and british pound. Any ideas, Piggingtons? I know that reducing US interest rates makes the higher-yielding euro and pound relatively more atractive vs the dollar, but why would they become more attractive against the yen? Surely the carry trade from yen into euro/pounds looks more risky now, with a greater chance of declining rates in Europe to keep up some with the Fed cuts.

Patient renter in OC

[Fearful]

Rich, that’s a first-rate write-up. Thank you.

I find it hard to believe that the Fed would knowingly allow moderate to severe inflation, but maybe that is preferable to risk of deflation?

One could argue that the emergency cut this morning was to forestall panic in the markets.

Or that declines in the markets informed the Fed that economic contraction was under way, so it made sense to avert deflation by proactively cutting interest rates to hold the money supply steady.

Very confusing times we live in.

[Fearful]

Rich, that’s a first-rate write-up. Thank you.

I find it hard to believe that the Fed would knowingly allow moderate to severe inflation, but maybe that is preferable to risk of deflation?

One could argue that the emergency cut this morning was to forestall panic in the markets.

Or that declines in the markets informed the Fed that economic contraction was under way, so it made sense to avert deflation by proactively cutting interest rates to hold the money supply steady.

Very confusing times we live in.

[Fearful]

Rich, that’s a first-rate write-up. Thank you.

I find it hard to believe that the Fed would knowingly allow moderate to severe inflation, but maybe that is preferable to risk of deflation?

One could argue that the emergency cut this morning was to forestall panic in the markets.

Or that declines in the markets informed the Fed that economic contraction was under way, so it made sense to avert deflation by proactively cutting interest rates to hold the money supply steady.

Very confusing times we live in.

[Fearful]

Rich, that’s a first-rate write-up. Thank you.

I find it hard to believe that the Fed would knowingly allow moderate to severe inflation, but maybe that is preferable to risk of deflation?

One could argue that the emergency cut this morning was to forestall panic in the markets.

Or that declines in the markets informed the Fed that economic contraction was under way, so it made sense to avert deflation by proactively cutting interest rates to hold the money supply steady.

Very confusing times we live in.

[Fearful]

Rich, that’s a first-rate write-up. Thank you.

I find it hard to believe that the Fed would knowingly allow moderate to severe inflation, but maybe that is preferable to risk of deflation?

One could argue that the emergency cut this morning was to forestall panic in the markets.

Or that declines in the markets informed the Fed that economic contraction was under way, so it made sense to avert deflation by proactively cutting interest rates to hold the money supply steady.

Very confusing times we live in.

[Author]

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