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January 22nd, 2008, 08:03 AM #1The World Economy Reacting To U.S. Markets
Wow, for anyone who believes that the economies of developing nations are no longer affected by the U.S. Markets, a bit of an eye-opener! India shut down its market today after it continued a record down turn from yesterday. Europe and Asian markets have been hit hard too.
Today, Treasury secretary Paulson issued a strong assurance that a broad based stimulus package is being formulated on an ASAP basis and bingo - the European and Asian markets have risen sharply. It's scramble time and with the U.S. federal reserve lowering the rate 75 basis points, they may have helped these world economies avoid a major crash. We'll see what happens when the Indian Sensex reopens....
January 22nd, 2008, 08:12 AM #2
Fed Cuts Interest Rate
- Join Date
- January 18th, 2005
- West Coast USA
The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday, the biggest one-day move by the central bank in recent memory.
January 22nd, 2008, 08:21 AM #3Refinance
Time to refinance the mortgage on my bubble-backed home..
January 22nd, 2008, 08:38 AM #4Originally Posted by Adam Ward
Just heard on the news - its actually the biggest one day move in over 20 years.
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January 22nd, 2008, 08:44 AM #5
This is a great time to re-fi and get a low fixed rate gang! I refinanced our CO home last week before we left for FL and we are going to rewrite it yet again next week. Fixed rates may drop as low as 5.25% so this is definitely a great opportunity for those who may have 6+% rates to knock some monthly expense down. :-)
January 22nd, 2008, 08:46 AM #6
Unless you're already at full appraised value, which, depending on where you live might be substantially less right now. Perfect time for golden borrowers with good equity. Everyone else should be careful with application fees they can't afford to lose.
January 22nd, 2008, 08:52 AM #7
Good tip Judi - equity and loan value are important factors, so for those who have a decent equity position and use a broker that does not charge origination fees or points - a good opportunity is on the horizon.
January 22nd, 2008, 08:58 AM #8
I've thought the same thing over the past day, Alan. I can't tell you how many times I've heard over the past month that the US economy is no longer important in the world, but things like this show that it is.
It's encouraging to see the government taking bold, quick steps to reinvigorate the economy. Between the tax rebates being proposed, the large interest rate cut and the bias toward future cuts, they will likely minimize any downturn and possibly even stave off a downturn.
January 22nd, 2008, 09:14 AM #9
I concur Michael...
The fact is that world markets are deeply and directly impacted by what goes on in the U.S. markets. Yes, the dollar has traded lower and emerging economies in other nations have been on the upturn. But don't let pride or naivity fool you - when the U.S. economy hits an adjustment period (what others may call a recession) ALL markets are quick to react.
January 22nd, 2008, 09:18 AM #10Originally Posted by MichaelColey
Longer term, they're letting us know (again) that energy independence is crucial to our security.
Energy saving information and products seem to be begging for a little affiliate ingenuity and elbow grease. :-)
January 22nd, 2008, 09:57 AM #11Originally Posted by Donuts
January 22nd, 2008, 10:09 AM #12
I agree that our proactive response to all this is to figure out what people are going to need and want info about in the upcoming "adjustment" period. There's always money to be made by someone in any economic climate. We just have to respond.
I'm delighted that for once, I'm sitting in a 2 person shop that can turn on a dime, so-to-speak, and re-work anything that needs it without attending a conference on "managing change" first.
January 22nd, 2008, 10:43 AM #13
I'm loving this thread.
A friend of mine and I have been in deep economic discussions such as this lately and frankly, it's fascinating. I'll keep my eye on this discussion.
And yes, we're planning on re-financing soon.-Don't criticize anyone til you've walked a mile in their shoes. Then when you do criticize them, you'll be a mile away and have their shoes.
- Silence is golden. Duct Tape is silver.
January 22nd, 2008, 01:00 PM #14
I hear ya Judi!!! nice to be mobile isn't it?! I'm awaiting a call from my finance guy to see if we can me down to 5.25, which could happen by weeks end or beginning of next week.
I was discussing the stimulus package concept with an RE agent last week and I mentioned that I would not be surprised if the fed cut the rate 3/4 of a point. He scoffed at my suggestion saying that 1/4 - 1/2 would be the first step. I got an email from him about an hour ago to let me know he is having a lunch of Caesar Salad & Crow... yummmmmm
The Fed meets Jan 29 and I would not be too surprised if they drop another 1/4 point either. They have to act very quickly and very agressively this time as the world markets do not have the luxury (other than OPEC) of a phased "try this and see" reduction strategy like Greenspan used for so many years. Due to record highs on the DOW, NASDAQ, S&P etc, this one could be a huge tumble if it is not nipped in the bud most expeditiously.
On the "upside" - other than D's excellent proactive observations, for those who perhaps are young and / or have not invested over the years to offset fluctuations in our economy, I would anticipate a maxed out stimulus package coming out of DC very soon. Other than interest reductions, some agressive tax reductions are on the way.
We will never see an end to fluctuations and adjustment periods as economies emerge, expand and then adjust. But as this one goes, this is a good year to deal with it as it is an election year and both parties can get a lot of traction on a big turnaround - so they'll be going for the max!! ;-)
January 22nd, 2008, 01:14 PM #15Originally Posted by Alan Hamilton-Don't criticize anyone til you've walked a mile in their shoes. Then when you do criticize them, you'll be a mile away and have their shoes.
- Silence is golden. Duct Tape is silver.
January 22nd, 2008, 01:49 PM #16
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