Wow... finally Mr. Ben slashed both rates by 75 basis point. Federal funds rate was lowered from 4.2% to 3.5%. Discount rate for the banks was lowered to 4% (was 4.75%).
Remember what happened when FED cut discount rates on 17th Aug 2007??? Before rate cut, DOW Jones index fell down from 14,000 marks (19th July 2007) to 12,500 (intraday low on 16th Aug 2007). Once FED announced discount rate cut by .50%, DOW started to turn the direction upwards which hit 14,160 on 9th Oct 2007.
Are we expecting the same things again happen after FED cut both rates by .75%? Of course, FED hope to see some stability in the market. Nobody can control the markets which are mostly being driven by emotion at the moment. Hangseng Index dropped 2,000 points today, isn't it crazy? However, I believe Mr. Ben moved to cut both rates was the best option that will bring some relief to the market. Another good thing coming up is the $140 billion to $ 150 billion economic stimulus package. Hopefully, it will kick the bear out and let the bull lead the train.
Do you think US will not try their best to avoid a recession? I don't think so especially now they are preparing for the coming election on 4th November 2008. To avoid a recession, we need something more than keep cutting interest rate. Mr. Paulse seems very confident that US can avoid a recession. Let see how he gonna do it. :)
ASIA MARKET (STI, HSI, NIKKEI)
Looking at the history, I am confident technical REBOUND for all ASIA market will start tomorrow onwards.
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2 comments:
Hi sb,
Haha, finally got your blog ready :P I'll read it everyday :)
eGreat market trend prediction. Please keep the prediction coming. We are waiting for your prediction on share names.
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