Why did the market plunge after today's Fed rate cut in Bush's so-called "booming" economy?

Question

Is it due to the greedy speculators desired 1/2 point and are upset that they only received 1/4 point?

"some investors were hoping for a half-point cut in the Fed's last meeting this year, and their disappointment took the market sharply lower."
http://biz.yahoo.com/ap/071211/wall_street.html

How do you spell "recession"?

Answer 1

The market was expecting a half point cut. Instead a quarter point cut was initiated, disappointing investors.

Grasping at straws I see.... Where were you the past few days when markets were up? Typical.

BTW, yes you spelled recession correctly, although I think you have the wrong definition. A recession would indicate a shrinking economy, whereas the consensus of economists believe that fourth quarter growth will be around 1%, following 4.9% growth for last quarter.

Try again next time.

Answer 2

It was not "disappointment" that sent the market down.

Stocks naturally have the expectations of traders priced into them. Investors, expecting a 50 basis point cut, priced that into the market. Naturally, it fell.

A smaller cut by the Fed signals that the economy is going to do better, not worse. Take a look at the economic data.

You also might want to try to understand the definition of a recession. That is, two consecutive quarters of negative real GDP growth. That would be extremely unlikely at this point. Real GDP growth (annual rate) for the third quarter this year was 4.9%, up from 3.8% in the second quarter. Those a very healthy numbers. Check the source I listed to see for yourself.

Answer 3

It is quite simple Chi Guy. The market went up several hundred points in anticipation of a one half point cut and when it was a one quarter point cut the market went back to its orgiinal positon. It is not greedy speculation. It is the ins and outs of trading, of which I am quite adept. We are by no means close to a recession. Check things out next Monday. The market will have recovered from today's loss that was less than 300 points. Overall, my portfolio and my income are way up under Bush.
And, if you want to make some money buy apple if it goes below $180, ebay, if it goes below 33 and google, if it goes below $680.

Answer 4

We covered this already in one of your earlier post. I told you it was to help the housing market and not the general economy which is doing just fine. By the way, the market will rebound by Friday. It's just pure speculation on what the fed would or wouldn't do and you also know that. Your slipping my friend, need to take a break and come back refreshed. Try Friday when the market has rebounded...

Answer 5

You know what's funny? People complained that the Fed rising interest rates were a sign the economy was doing bad too earlier in Bush's term, and those same people were typically liberals. I think the real issue is that a Republican is in office, not that the economy might be doing well or not.

Answer 6

The market goes up and down. That's the way the market works. Today's news caused a drop. It's one day. If the new low continues over the course of weeks, then you have something to say. But speaking so soon sparks of naivete and desperate thinking for the worst.

Answer 7

I think it is a perfect storm of all of those things including the war which didn't need to be waged against Iraq. My list that is included in this perfect storm that is hurting America are listed below. The gas prices are also hurting us immensley as well because it is causing food prices to skyrocket. In Hawaii peanut butter is up to 8 dollars for a medium sized jar. 1. Globalization and supply side economics (it's killing us economically as well as many other countries. The only people benefiting from it are the corporate stinking rich). 2. Nafta, corporate de-regulation and financial banking de-regulation which happened under Clinton as well. (Clinton may have passed it, which was bad enough, but it was pushed through by the GOP and started under REagan and pushed through in the senate or congress by Newt Gingrich and his GOP contract on America). 3. Iraq war and the amount of money we are borrowing and spending for it. 4. Skyrocketing national debt 5. Skyrocketing gas and food. 6. Poor education which is hurting our future economy. 7. The bloated military budget which takes over 58% of our taxes to pay for. 8. Healthcare costs in which people are losing their homes and savings when faced with catastrophic healthcare costs for a family member. 9. Farm, oil and corporate subsidies and corporate welfare which are killing real competition and putting our tax dollars in the hands of the rich. 10. Ignorance by the people who are continuing to vote for the same party (the GOP) who keeps screwing the American people and middle class. And, the same ignorant people who think that if they keep voting for the same Republicans who screwed us in the first place that they are going to finally get a change in government when voted in again. This is the largest problem because we keep doing it to ourselves. 11. Borrow and Spend policies of the current Bush administration which Reagan also did and got us in deep trouble in 1988. BTW, just to let everyone know, I never voted for Clinton, nor would I ever do so now. With Rubin in his cabinet, he was nothing but a Neo-con who happened to be in the Democratic party. I never voted for Republicans either.

Answer 8

Because excuses that are given for market movement are B.S. The stupid speculators who sold because they were so disappointed (Boo Hoo) regarding a less than guessed rate cut will be buying those stocks back. It does however make the brokers smile.

Answer 9

So-called economy?
see any souplines latey?
Ever get hired by a non-greedy poor person?
Ever meet a non-greedy poor guy? Not likely Buddy!
You know who I am Chi-guy. I grew up in China, and I almost starved to death as a child.because of Communism.
I'll put up with a few greedy guys because they are the ones that creat the jobs for the rest of us common non-greedy types! Thanks

Answer 10

To answer your question;

The market is still up for the year, no recession.