乱弹美经新闻--The Fed\'s Choice

From today's new,Fed mulls interest rate cut, maybe to all-time low

 

1. What percentage will the Fed the rate: 0.5 percent, three-quarters, or even more? Market has priced in at least half-point cut. It will be the lowest on records since it is tracked in 1954
2. As to the prime rate, now is at 4 percent, and it will be 3 percent eventually. It is good or bad to encourage people to spend by borrowing money at a much lower rate?
3. What’s other choice of the Fed: A) $700B finance bailout , inject cash into banks in exchange for partial ownership stakes B) Buy long-term Treasury or agency securities on the open market. Why Fed buy from the Treasury? 左右手互博?　C) Issue its own debt, the problem is who will buy if US is keep printing dollars. D) Inject cash directly to the companies bypass the dysfunctional banks! I like this idea cause the current finance system have been destroyed totally!
4. The Fed’s balance sheet: $900 billion in September , $2.2Trillion now. Did we see problem solved or situation become better? Where is the taxpayer’s money , man!
5. The job loss number: Since last December, nearly 2 million hard-workings are dumped to the street; By the spring of 2010, another 3 million ahead!
6. Households’ net worth: Fell 4.7 percent in 3rd quarter to $56.6 trillion, the 4th straight quarterly decline. Remember, what is the number of sub-prime bubble, $62 Billion, hehe, you know the game!

Here is my reading about the news:

1. The Fed is kept busy printing the paper money without thinking where is the root cause!
2. Still, the Fed is lowering the prime rate and encourage people to spend by encouraging borrowing. Another round spending bubble to save this one?
3. Should US change their wasting life style, and switch to hard-working, old style like those in 1930s. Should US start to manufacture everything they need instead outsource those work to other countries because they think those jobs are simple and the labors there are cheaper! Perhaps that will solve the problem.