FED CUT ?

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For the first time in more than four years, the Federal Reserve appears ready to lower interest rates to prevent a housing meltdown and a painful credit crunch from driving the economy into a recession. A rate cut would affect millions of borrowers, with the intention of getting them to spend and invest more, which would revitalize the economy.

If the Fed drops the rate, then the prime lending rate that commercial banks charge many individuals and businesses would fall by a corresponding amount. It now is at 8.25%.

Fed action would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for people to finance certain credit card debt and for homeowners to take out popular home equity lines of credit, which often are used to pay for education, home improvements or medical bills. But finally, the Federal Reserve cut its key lending rate Tuesday for a third time in a row and signaled that it is sufficiently worried about a financial freeze-up that it may be willing to make further cuts.

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Will U.S Dollar Crash ?

Gnutrade is all interesting. Its a New Financial Game

First the bad news: The U.S. trade deficit hit a record $666 billion in 2004, and the Euro is up 47% against the dollar since May 2002 and now compared it is totally declining. The dollars decline means slower economic growth, higher interest rates, a stagnant stock market and a slippage in the U.S. standard of living. All of which is enough to make me a pessimist.

Now the good news: The dollar isn't going to crash, and those market pundits urging you to short everything except gold and silver are wrong.

Don’t consider the extreme scenarios because they underestimate the feedback mechanisms in capitalist economies that kick in when a trend swings too far in one direction or the other. In the current case, these mechanisms will help limit the damage to the dollar -- and to the U.S. and global economies.

Thus U.S economies can be brighthened quickly.

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Thanksgiving for Bears, Christmas for Bulls

Here is an old Wall Street saying that while the bears have Thanksgiving, the bulls have Christmas. Since both November and December have recorded above-average monthly returns and below-average frequencies of monthly declines since 1945, one has to conclude that this saying relates to the days just prior to each holiday, not the entire month. I think it is fairly easy to figure out why optimism grows during the final month of the year: The current year is nearly behind us and the focus has shifted to the year ahead, complete with optimistic earnings growth projections and price appreciation projections.

IS --- US economy becoming a loss leader?

The U.S currency is already down and the sub-prime mortage is also becoming a more serious issue these days. The U.S stocks futures is also not doing well in the market. If we look at yesterday’s market of U.S stocks, there is a decline in the values of the shares. Standard and Poor's 500 Index futures fell by 3 points and the Nasdaq-100 also lost 3.50 points. The unemployment rate is increase day by day. Investors are concerned about the job market. Crude oil declined on concern an economic slowdown may cut demand in the U.S., the world's biggest energy consumer.

It is expected that the U.S economy will cope up by the time of Christmas and its not becoming a loss leader.

Dollar under Real Pressure

The U.S dollar is under real pressure these days. The dollar value is under going a deflation stage. The Asian currency is taking full advantage of this serious situation. The economy rate in US is decreasing and taking fuel to the problem the US sub-prime market is also sloping towards down. The downfall in the housing market and in the currency market has led the investors in U.S to rethink on their decisions. One US dollar is now equal to 39 Indian Rupee. It is expected that the dollar may fall in the near future and hollidaying in New york would be much cheaper than holidaying in Malyasia.