Fed ready to slash interest rates- Response

This article was at first somewhat difficult for me to wrap my head around. Fortunately, my mother works with the stock market and was able to better explain it to me. This was extremely helpful as I now know the terms used in this and many other articles such as "home equity" or "prime rate". Once I managed to decipher this article I found it very interesting. I did not know that the Federal Reserve was in charge of the interest rate applied to banks and loaning. I also did not know that it had so heavily been modified in attempt to revive the economy. I did know about the loaning freeze occurring though and I found it very interesting to read about how the key interest rate was associated with this freeze. I am not sure if I personally am in favor of these decisions being made to slash the interest rates. I am aware that despite their repeated cuts in the past, they have had no affect on the loaning aspects of our economy. With the rates as low as they are, it seems that there is little room for repeated maneuvering. There is a point where the Fed's can no longer cut, and that's 0%, a number looming on the horizon.

Fed ready to slash interest rates

The Federal Reserve is seemingly prepared to slash a key interest rate.
The Fed's key rate has been dropping for quite some time and is moving closer and closer to 0%.
The Fed Chairman Ben Bernanke was in a two day meeting working on the economic crisis and exploring more tools to help the situation other than interest rate cuts.
"The message is simply the Fed stands ready to do everything in its power to stop the economy's free fall." stated Richard Yamarone who is an economist at Argus Research.
This is to suggest that perhaps this slash is more of a psychological tactic than a financial one.
Since the economic recession began last December, the Federal Reserve has already all but used up it's most significant tool for influencing the economy. The target to the federal funds rate has been cut to 1%, a number seen only once in this half of the century.
It is speculated that this rate could drop to 0.5% or even 0.25%.
The area of the economy that the Federal Reserve has been trying to affect are the loans currently not occurring between banks.
With so many unstable companies and customers, many banks have been very reluctant to lend money and help reinstate the cash flow necessary.
The lowering of the prime rate would affect home equity loans, certain credit cards and other consumer loans.
By dropping the rate from 4%, where it currently is, to an even lower mark would perhaps stimulate spending.
Up to now however, the rate slashes that have been put into effect have yet to have the influence desired.

Phoebe Responce #2

No one has commented on your layout yet, and I am shocked because it's super cool- teach me how to make the banner at the top? It really adds to the effect.
Anyway, in terms of your information- there's a lot of it! Probably due to how it's such a current topic, you were able to find articles that related perfectly to what you are researching. I just have one question: are you planning on following a little more on circuit city or just big-box stores in general?
Also, most of your blog seems to be the same colour and that makes it very hard to read. Other than that, great job! Your summaries of the articles in particular were impressive.

Kelsey Schwarz- Second Response

You certainly have gathered a ton of good information. I think it's really cool that you're so into your topic and similar things related to it as well. I like how you have the gadget with the price of oil. You have such a broad topic and you could go anywhere with it really like the Circuit City thing, to stocks, to Obama. There will definitely be enough information to keep you going..for forever. I also like you have statistics and on the bankruptcy article how you had all kinds of different facts. Good job.

Morgan response #2

I really like how you are looking at the recession. Moreintrest in the companies and stock than the politics, you should try to keep it that way. My only issue was how you had really simple mistakes ( like leaving a letter off) that would confuse me in the middle of reading. I'm preety sure there is a gadget that you could get so you could show the rise and fall of the stock market, if you continue to use articles about the stock marcket and its journey.

Amazing,yes . . .

I, too, am so impressed by Obama's active involvement in current affairs and his planning for the transition to be as seamless as possible, his creation of a "brain trust" as he chooses the best and the brightest to help him when he becomes President, and his plans that seem to reflect some of the CCC and WPA ideas of the past. A fascinating topic, which does change daily!

A promise of help from Team Obama (Response)

This article was very interesting and indeed, very intriguing. I got this article from The Week, a weekly article that I have now come to love to read. This article seemed to shine light on many of the issues that Obama is creating for himself. While it is thought to be wonderful, economic stimulus package the be signed in by Obama, it is worrisome a as to how the meeting went. I did find it very interesting though that the article speaks so highly of him and his team.
I find it absolutely fascinating that Obama has been able to put together such an organization without ever stepping foot inside the White House. I myself receive many emails a day from the Obama campaign outlining what is to be done on a certain topic.
I do feel that this team will bring about good change in the American despite what critics might say.
I dislike the immediate dislike of Summers however. I believe that one administration should not be crippled by the outcome of a past administration and it's staff.

A promise of help from Team Obama

This week president-elect Barack Obama announced the members of his chosen economic team.
Obama is supposedly ready to sign in a massive economic stimulus plan moments after his inauguration.
The package will supposedly provide 2.5 million new jobs through the building of bridges and increased work on alternative energy sources.
It is thought to cost about $700 billion dollars however, Obama promises to revise the federal budget to compensate for the costs.
Obama chose New York Federal Reserve President Timothy Geithner to be the Treasury secretary.
Obama chose Harvard economist and former Clinton Treasury Secretary Lawrence Summers as head of the National Economic Council.
Summers "championed deregulation of derivatives, the "toxic assets" that have spread financial chaos throughout the world.
Obama stated that a new advisory board would be created to be headed by former Federal Reserve Chairman Paul Volcker.
All three are well known and respected on Wall Street.
Obama stated "Help is on the way" referring to his newly selected team. "I think it is very important for the American people to understand that we are putting together a first-class team."
Geithner has been a supposed "ring master" for the large government bailouts.
The stock market has approved of the decisions. It rose 900 points after the decision was announced.
Obama has promised not to raise taxes on the higher class, and instead to simply intends to cut the Bush tax cuts around 2010.
Obama is working with Bush to make a clean transfer of power between presidents.