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http://money.cnn.com/2008/10/28/news...ion=2008102912
Does this not compete with the recapitalization goal of the bailout? As they cut the federal fund rate, banks cut the rate they pay on savings. Doesn't this cause people to move their money out of the banks?
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
Update - They cut it to 1%
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
Obviously the rate cuts weren't working......
What is needed is a balance budget and ultimately, the reduction and elimination of the national debt.
"All roads lead to Putin" -- Thomas Jefferson
That is crazy talk. Damn liberals.Originally Posted by saltydawg
No.
But, please finish the question.
"...... move their money out of the banks" to where ??
To foreign banks converted to Euros.
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
There is a lot of currency risk in doing that. Of late, the Euro has been dropping against the dollar.
Good time to buy.
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
What do you think will happen if/when the European Central Bank and the Bank of England reduce rates also (widely expected) ??
Back to the 1st Q: Why do you think the Fed's action would "compete with the recapitalization goal of the bailout" ??
The goal being for banks to extend more credit. But can't they only extend credit by a factor of what they are actually holding in deposits. Thus, less deposits equals less to lend?
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
Actually lowering the federal funds rate allows banks more flexibility in the money they invest in the economy because they pay less to borrow it. I think it actually allows them to increase the rate since the money they buy is now so much cheaper. Or atleast that is the belief behind it.
Also, I might just take my money out of the bank and buy a fancy new European or Japanese car.
Jordan Mills on choosing Tech:
“It’s a great experience seeing them play. It was a good atmosphere. The fans stood up the whole game and never sat down. They have a great fan base.”
How is this less deposits?
Your wife would kill you.
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