News of the Federal Reserve cutting its interest rate is not unusual, especially during these times that the nation is in dire crisis. In the past several months, the Fed already made such moves, cutting its interest rates to unprecedented levels to ease the impact of the crisis by bringing back the confidence of the financial investors and spur consumer spending.
But what is shocking is the news that the Fed is prepared to cut the rates by 0.5%! This is an all-time low. No other central bank in any country has done this – cutting the federal fund rate at such level – before and even at present. The Fed’s recent action shows the seriousness of the situation. However, economists believe the Fed’s plan is a psychological move. An economist commented, “It’s a feel-good thing.”
Posted by Jones on December 16th, 2008 :: Filed under
$$$ CRISIS
A French utility company, EDF, has offered to buy around 49.9% of Constellation Energy for $4.5 billion. The offer by the French company almost already erased MidAmerican Holdings, which is also offering to buy the entire Constellation around the same amount. However, with the French bid, the American company’s bid will surely be rejected.
EDF is a large nuclear operator, if not the largest operator in the world. The offer can be seen as a daring move on the part of the French. It seems that the French company wants to penetrate the U.S. utility market and maintain its status as a dominant nuclear plant operator in the globe. Will this be a prelude to more foreign investors buying up American companies?
Posted by Jones on December 13th, 2008 :: Filed under
$$$ COMPANIES
The stock market is in dire need of help, even from Santa Claus. Investors are pinning their hope for a “Santa Claus” rally in the stock market trading before the year ends or else the economy would be in a deeper crisis, and comes nearer to depression. Analysts at Wall Street said the Standard & Poor’s index already dropped 39% this year, at the same level in 1937 and the second-worst drop in the history of S&P. A little more bad trading and the index could collapse to 46%, the same rate when depression hits the country in 1931.
That would really be bad. certainly, the economy cannot recover if such poor performance continues in the stock market trading. As such, stock market analysts are hoping for a rally, even just for one day as the year is closing now, to boost the stock market and prevent a record-low this year. Let’s cross our fingers then and by the way, the prices at the stock very low, it seems there is a holiday sale on stocks this year. try and grab some shares now while the prices are very low.
Posted by Jones on December 11th, 2008 :: Filed under
STOCK MARKET
Amid the current financial crisis that is crippling the economy, one good source of investment is the repayment of the mortgages. A mortgage expert commented that instead of thinking of other investments, it is best for the people, especially the elders, to repay their mortgages as it has a higher yield than other risky investments.
That is certainly true. Mortgage repayments are a no-risk investments. Since home costs today have plunged sharply, it is not a good idea to keep the seniors’ home equity into other investments. The current conditions are not suitable for making such risky investments. Perhaps the best thing a senior can do at the moment is to allot extra money to repay the existing mortgage so that in the future when the dusts of the financial turmoil have settled, the best investment opportunities can be seen. It goes without saying that the right attitude so far might be, “wait and see.”
Posted by Jones on December 9th, 2008 :: Filed under
REAL ESTATE