Oh for God’s sake, how am I supposed to plan for *anything* in this crazy world.
The Fed. just cut interest rates by half a point.
We were supposed to plan for steadily increasing interest rates, in quarter point increments, for the foreseeable future. This was going to have the effect of slowing growth (money would be harder to come by, so businesses would hold off on taking out new loans) and slamming anyone who carries their debt in variable interest rate vehicles (credit cards, adjustable rate loans). Plus, higher interest rates encourage saving (CDs, bonds, and savings accounts get better with higher interest rates) and are awesome for people who already have money to put in savings accounts.
As a side benefit, if bonds are good, then people lend their money to the government. This shows up as part of the “government debt,” but it also makes the federal budget look more balanced.
This need to slow growth is based on the idea that the reason our economy is doing so well is that people are spending like banshees … and we need to slowly apply the brakes. Go talk to the owner of your local barbershop, fitness school, or lunch restaurant for a reality check on this idea. Seriously, when the economy is good, people eat out and pay people to cut their hair and make them fit. When it’s bad, they do these things for themselves. Go ask. I’ll wait. Okay, now that you’re back, we agree: The economy sucks right now.
The market seems to have noticed that it’s built on the usual house of cards, that all the “growth” we’ve seen is concentrated in the top 0.1% of the economy. The rich have gotten richer much faster than the rest of us can support them. It (the economy) has thus decided to do a handbrake turn instead of a controlled slowdown. Suddenly, the Fed was forced to look up from its daily reading of President Bush’s favorable BS and realize that … wait … the economy is not really awesome for most people. Maybe they need to accelerate … no wait … what … help?
Refresh my memory:
* Why do we have a managed economy?
* What benefit does the stock market provide to the country, other than as a way to justify the existence of a managed economy? Go on, say “it creates more capital for businesses and it helps the economy!” I long to spank people who believe this tripe. Reveal yourselves.
And I’m supposed to time the selling and buying of houses in this market? Bah!
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