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Stocks, Recession and Rate Cuts: This Time is Different

December 1, 2008 RSS Feed Print

On a day when the National Bureau of Economic Research says the current recession is both official and a full year old and the Federal Reserve Chairman says he's willing to cut interest rates from an already rock-bottom 1 percent, the contrarian in me expected to see at least a few folks start shouting "Buy!"

That's because during most downturns by the time a recession is officially announced, the damage has already been done in stocks. That, mixed with possible rate cuts that are "certainly feasible" according to Ben Bernanke should theoretically be good news for battered shares. Not this time. Here's why:

Consumers are only going to get more strapped. Bearish banking analyst Meredith Whitney is warning the credit card crunch will be the next shoe to drop when banks cut back some $2 trillion worth of credit lines over the next 18 months.

Factory sector pain is still getting worse, and manufacturing is still seeking a bottom, according to the Institute for Supply Management.

In case you missed it today, the S&P is down another 6 percent today and, as Felix Salmon rightfully points out it's not really because of the recession call, which was already obvious to any market watcher with a pulse. It's because the faltering economy is still in the process of catching up to Wall Street expectations that remain overly optimistic, even after what has been a truly awful year.

The NBER's statement is here.

Bernanke's remarks are here.

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Yes, we are in a recession. Did anyone really not already know that? Jobs have been cut, businesses have failed, and people are on the verge of loosing everything they have ever worked for, from their homes, cars, savings, credit ratings, everything they thought was theirs, could be stripped away by the lenders and banks. There is something you can do to protect yourself and your family financially though. There is a supplementary unemployment insurance that is available and will pay you a cash benefit if you become unemployed. This pays you directly and is not one of those plans set up to protect the banks and lending institutions. You use the benefits as you see fit, while you search for a new job in this dismal economy. Visit www.TheSalaryGuard.com for more infomation, and to fill out your application online.

Nathan Evans of SC 8:31AM December 02, 2008

All the bailout money does is fuel lowering the stocks so more money can be milked from federal coffers and the little guys pockets.
It, the stock market, goes up for a short spurt on each bribe or payout ,whatever you prefer to call it.
Then it dives as greed for more of your money overcomes morality and rewards those who steal all they can take.
The more you bail them the more wealth insular billionares swallow up.
Whoes getting our money? Do They Care about you?
THE BAD GUYS ARE INVARIABLY!!!!!!!!!!!!!!!!!
AND they are going to go with their gold without a care what they do to you when they get it.
Always have and if you give an inch they always will.
F$%K you bailout thieves.
F^%K you who claim to be chosen to guide us!
You have no telephone number to a higher power
but you sure wouldn't know that asking them.
I've removed my money from your thieving institutions.
If Armed conflict occurs I will stop paying taxes to bleed the government white and starve you thieves
and your henchmen.You have stolen Americas birthrite.
The Fulds of the world are like hyenas with a belief in there god given right to do, "WHAT THEY WANT" when they want, with company money and employee retirements.
The Barney Franks are like autocrats and do what they want with other peoples hard earned tax wealth
according to their liberal agendas only.For there
personal agrandizement and empowerment ,
and preferentially to the voting constituency
to garner more votes to increase there power.
The MCCAINS of the world will decide what you want period. They know better than all of you.
About everything moral. About everything, period.
And regardless of your opinion our your principals
ignore all lesser "HUMANS" And imperiously decide for all "for their own good".
The special interests,read those who want what you have,
Will rewrite the "living constitution" until it reads convenient to their abomidable lifestyles.
They will make their point on your backsides to right the wrongs they percieve you are guilty of inflicting
on them.By removing your voice because it is "misinformed and ignorant".
And no one can stand against them, that is the worst of it! We are sold out. The enemy is among us.
To these types common people are a distraction that must be muzzled and margenalized to remove their erroneous belief that they can make their own choices for their fates. They must be cleansed of their seditious tendency to think and act for themselves.
SELLOUT is a better description of this scam.
Worse its a sellout to those who hate what this country used to stand for. Who could care less what damage they do because they will not have to live with the downside. ITS ALL UPSIDE FOR THEM.
They are elevated and we are margenalized to remove our
ability to meddle in the machinations.
Would be good for this "democracy" to give
commoners the ability to affect their futures.
THAT WOULD BE VERY BAD FOR THESE TYPES.

Steven jackson of CA 5:39PM December 01, 2008

Stocks, Recession and Rate Cuts: This Time is Different

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