On CNBC on Aug. 3, Cramer pleaded like a grounded teenager missing the prom for Ben Bernanke to stop being an academic and open the “discount window.”
This morning, that’s just what the Fed did.
The Federal Reserve chose to cut its discount rate down to 5.75%. The “discount rate” is the rate the Fed charges “qualified” lenders (banks and stable corporations) for temporary loans. The move shows that, despite Fed Governor William Poole’s statements to the contrary, the Fed isn’t going to sit by and let investors in subprime garbage get what’s coming to them.
The U.S. market reacted by skyrocketing over 2% within the first five minutes of trading.
4 comments:
It is the best news we've had in these a couple of weeks. However, how long would this last? When next month all the hedge funds show their balances, would there be another round of sell off? I am still expecting some more rough time ahead. I'd love to know what everybody else is thinking.
I would like to grant you credit by providing your thinking :)
In my view, the market is unstable yet.
Thanks for the kind words. I am rather new to the market so there is a lot to learn. I found this is a great place to learn how to feel the market. I am rather shy on the big pictures of economy. Is there a good place to learn that?
to learn knowledge about the macroeconomy, it is better to read the book:)
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