Canada cuts Fed rate to 0.75%, yet US Fed rate is still 1.25%

[davewindsor]

Long overdue for Canada, especially after this week's crippling bear market over oil and corona, but not sure why the US hasn't followed suit as both countries may be headed into a recession.

https://www.bnnbloomberg.ca/bank-of-...0-75-1.1405653

[Lowell]

Standby, it's coming. Some say a cut to Zero is a possibility.

[Richard]

EU is at -02,the US economy has been strong compared to Canada and can weather it out for awhile.

The bear market oil was between Russia and Saudi and trying to force the US below our $50 per barrel production cost cut off,because we were selling to much oil on the market due to excess.

It was just a market game and not anything long term,Trump put a checkmate to it by buying up under the guise of adding to our national reserve,which was already full anyways.

We had a glut of oil but when we no longer depended on others they lost a big customer and that was how they reacted.

Canada was already dropping against the dollar over a year ago,that’s why they had to add another 3 billon to the cost of the fantasy bridge.

We are two separate economies it is tough to say because Canada crashes it will cause the US to crash.

The market is like a wall switch,as soon as something solid comes out about the virus it will flip.

according to three people familiar with the matter who spoke on condition they not be identified.

Ya gotta watch Bloomberg,they have a bit of a conflict of interest when it comes to the markets and ability to manipulate them to their advantage.

[JBMcB]

Fun fact: the idea of setting interest rates was not to "regulate" the economy, but to control inflation. Adjusting central interest rates to "goose" the economy is a relatively recent phenomenon.

The good news is it seems to work, to a certain extent. The bad news, and has been the problem recently, is that if you keep them low for an extended period of time, the economy becomes accustomed to these rates, and you can end up with severe market distortions. See the real estate bubble of the early 2000's as an example. Cheap money = more risk taking.

The other downside is, if there is another economic problem, you've taken lowering interest rates off of the table as an economic tool, as they are already very low.

[Cincinnati_Kid]

Fun fact: the idea of setting interest rates was not to "regulate" the economy, but to control inflation. Adjusting central interest rates to "goose" the economy is a relatively recent phenomenon.

The good news is it seems to work, to a certain extent. The bad news, and has been the problem recently, is that if you keep them low for an extended period of time, the economy becomes accustomed to these rates, and you can end up with severe market distortions. See the real estate bubble of the early 2000's as an example. Cheap money = more risk taking.

The other downside is, if there is another economic problem, you've taken lowering interest rates off of the table as an economic tool, as they are already very low.

Correct. These moves are usually reserved for perking up lagging economy. They shouldn't be implemented now, the economy has 10 years of sustained growth. But this virus may speed up a impending recession. It's going to happen sooner or later.

[Lowell]

I have heard rumblings of the following and it is disturbing. We thought measures to prevent trashy financial products were in place after 2008, but corporate banksters always seem to find way.

Here's what could really sink the global economy: $19 trillion in risky corporate debt

“The IMF conducted a stress test based on a hypothetical economic shock that's half as severe as the 2008 global financial crisis. The results suggested that corporate debt worth $19 trillion from eight countries — China, the United States, Japan, the United Kingdom, France, Spain, Italy and Germany — is at risk of default in a future downturn of that magnitude because companies would struggle to generate enough cash to meet repayments. That would be 40% of all corporate debt.

“A wave of defaults, or even a series of rating downgrades and repricing, would shake the financial system.”

https://www.cnn.com/2020/03/14/inves...rus/index.html

[davewindsor]

I have heard rumblings of the following and it is disturbing. We thought measures to prevent trashy financial products were in place after 2008, but corporate banksters always seem to find way.

Here's what could really sink the global economy: $19 trillion in risky corporate debt


https://www.cnn.com/2020/03/14/inves...rus/index.html

With the stocks and bonds as low as they are on Friday, Billionaire Carl Ichan is taking a short position because he thinks they're going to go down a lot more:

Billionaire investor Carl Icahn told CNBC on Friday he expects the U.S. commercial real estate market will crumble, much like the broader housing market collapse of 2008.

“You’re going to have this blow up, too, and nobody’s even looking at it,” Icahn said on “Halftime Report.”


Icahn said he is shorting the commercial mortgage bond market and it’s his “biggest position by far.”

https://www.cnbc.com/2020/03/13/icah...al-estate.html

[Richard]

Lol you know how all of those guys became billionaires?

You make money when there is blood in the streets,when there is no blood,you create it.

I am sticking with hookers and blow,we are going to dead in 10 years from climate change,1/2 of the population will be wiped out from the virus and the rest of the world will go into a massive economic collapse.


Activist investor Carl Icahn will get 9.9 percent of Tenneco voting stock in the acquisition of Southfield, Mich.-based Federal-Mogul, which Icahn controls. Trouble is, Tenneco stock is worth about 20 percent less than it was back in April, when he agreed to sell.
That should make Tenneco CEO Brian Kesseler nervous. Icahn doesn't suffer investment losses meekly. He has shoved out CEOs and forced sales, breakups and massive share buybacks at some of the most recognizable names in American business. Time Warner, Motorola and other companies much larger than Tenneco have caved to his demands.

https://www.chicagobusiness.com/joe-...e-tennecos-ceo

Icahn would love for his predictions,manlipulations to come into fruition so he can scoop up large commercial holding companies then piece them out.

He is a raider,if he is giving predictions of gloom it is because he sees profit in it because that is where he makes his money.

"This certainly is another match being lit [near] the bonfire of corporate debt liabilities," said Simon MacAdam, global economist at Capital Economics. "There's definitely potential for systemic risk."

That is a pretty safe statement to make.

They are not taking into account the amount of businesses and cities and states that will be refinancing their debt load at the lower interest rates freeing up those funds for re-investment,look at California when they say real estate is in a bubble or to high,they are still getting 1 million for a shred to live in.

The 2000s was indicative of millions of Americans jumping into the real estate game that had no business being in it based on interest only schemes,and the players that pumped and dumped in order to suck everybody into it,said the spider to the fly.

There is a difference between low interest rates to encourage refinancing or debt consolidation verses interest only with a surprise according to the market fluctuations.

Where I am at both residential and commercial are at the same levels that they were in 2006 But they are at the level they would have appreciated had the crash not happened.

I am not seeing this bubble they are referring to and real estate is still turning over because of low fixed interest rates,I wish RE would crash again,I would do the same thing I did last time,cash out when it is high and buy when it is low.

The vultures are not going to give you warning,by the time they make their play it is too late for everybody else.

People like Ichan are not about giving free investment advice to the public,if they start you really have to question motives.

Here is a place where you can get a bunch of stats and graph thingys

https://tradingeconomics.com/country-list/interest-rate

Like they say,we are not in an economy based financial crises,we are in a virus based financial crises that will V curve once the virus passes.

[davewindsor]

US Fed rate now lowered to 0.25%, yet Canada's rate is just 0.75%? Canada just isn't doing enough to save their economy. The US Federal Reserve will also be purchasing back $500B worth of treasuries and $200B worth of mortgage backed securities.

https://www.youtube.com/watch?v=Qg_TMFXLhvw

[Lowell]

US Fed rate now lowered to 0.25%, yet Canada's rate is just 0.75%? Canada just isn't doing enough to save their economy. The US Federal Reserve will also be purchasing back $500B worth of treasuries and $200B worth of mortgage backed securities.

Usually a cut of that magnitude would bolster the market. Instead it has created a crash in the after hours market. I'm guessing the takeaway from investors is, "Oh ****, this has to be far worse than I thought if they are cutting a full point and a quarter."

The after hours market crashed to point of hitting the safety valve.

Investors were unassuaged by news that the Federal Reserve is cutting interest rates to zero. US stock futures dropped 5% Sunday evening, hitting the "limit down," meaning they can't fall any further.

Dow [[INDU) futures plummeted and were last down 1,041 points, or about 4.5%. S&P 500 [[SPX) futures were down about 4.8% , while Nasdaq [[COMP) futures were down 4.5%.

[313WX]

Long overdue for Canada, especially after this week's crippling bear market over oil and corona, but not sure why the US hasn't followed suit as both countries may be headed into a recession.

https://www.bnnbloomberg.ca/bank-of-...0-75-1.1405653

Welp, this thread didn't age well...