Wall Street Surges

Wall Street soared today on the news that the Fed was going to cut interest rates by a whopping half point (and yes, that’s a big move). The Dow Jones surged almost 340 to almost 13,740, it’s biggest jump in nearly five years. And folks are saying that 14,000 is surely around the corner. Now combine this with other news. Namely, that wholesale prices fell by 1.4%, and that home foreclosures soared in August. Are we in the middle of good news or bad news? Adjustable rate mortgages (ARM’s) scared the poop out of lot of folks when they “adjusted a few months ago. October is set to see yet another adjustment for a huge chunk of ARM home owners. Will this rate cut soften the blow? Probably not. Those that really could not afford to own a house are the ones most affected by the ARM stupidity and are probably going to get whalloped regardless of Fed activity. The dollar is still weak against other currencies making US goods competitiveness against those of other countries “strained”, as it were.

So while the rate cut might put a few more dollars in the pockets of those whose credit instruments are variable and tied to the prime rate (and can afford their bills)… and while the rate cut might pump up Wall Street and cause business to expand ever so slightly… one has to ask if there will be anything really tangible felt by the average consumer? And before anyone asks, I do not know how to fix things. If I did, the movers and shakers would have a tatoo of me instead of Greenspan on their forearms… It will be interesting to see how the Venomites React


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