FED JOINS IN ON GLOBAL RATE CUT PROGRAM, but not enough...YET !

Here's a quick comment on the 1/2 point interest rate cut the Fed just joined in on, which is the first global interest rate move since the 9/11/2001 Terror Attacks.

Come on Ben, why only cut 1/2 point when that what was expected? You know you should have cut the whole point, and will before this is even close to being over? Your "slow to react" decisions are part of this problem, which we know you didn't create, but certainly haven't nipped in the bud.

The markets were setting up across the globe my midnight PST for a crushing decline, with Europe and Asia markets down 5%-10%, and US markets down another 5%. With this rate cut, the US markets have moved a couple percent higher in the overnight futures market at their best level, but while I'm writing this, have given it all back and are negative again now, about 6a PST, 30 minutes before the official market open. There may be a few hours to few days of rally, but again, a 1/2 point too little to do the job. The market knows they could have cut a full point, so will do its best to push whatever buttons needed to get what it wants.

For now, the losses of the overnight rally and turn negative on the day will scare the "you know what" out of Uncle Ben, and the potential for or actual crash that could happen next might finally cause the needed action by him and his FOMC buddies. A 1/2 point rate cut still doesn't fix the problem, which can be summarized in a few words now: lack of public confidence. Had our government decided to send each household $100,000, we'd likely have seen the bottom. True, that would cost about $3.5 trillion, but that is about half what the entire mess will likely take to fix, and they have known that for the last year. They know that if they play the "little at a time" game, they can get the public to "feel the pain" and take the medicine (paying the tax bill). They know that if they take the "right" medicine and hand out the $100k checks, they would get the response the country needs, but they'd all be unemployed. Too bad they aren't doing the fiduciary duty they signed up and were elected/hired to do: put the public interest in front of their own.

By the way, long time followers of these writings can check back to my July 30, 2008 comments titled: "SHOCK AND AWE SELLING IMMINENT...no stock will be spared!" I showed a picture of the S&P 500 that issue that had closed that day at 1265. It closed yesterday at 996, fully 21% lower in 70 days. Even worse, the Nasdaq is down 35% below its Summer high! More recently, the broad market indices are down 15% in the last week alone!

Hopefully, many took the warning and have been spared the pain of the last couple months, and those that follow.


For what it's worth,

Ken