Fed cuts interest, oil down a bit.

[stratman]

Everyone is perplexed at the numbers coming in: gas prices up, gas demand low, oil prices down, refining down, gas prices up again:

http://www.msnbc.msn.com/id/12400801/

 

[MUDSHARK]

Not surprisingly the interest rate cut rallied gold which had dropped ten percent during the technical rally. The technical rally should continue as the drops have been on low volume while the rallies have had moderate volume. It appears a strong support level of 12,800 has been established. I would not be surprised to see a rally in the 13,400 range in May. The weak dollar will keep oil prices high for us weakened recession/near zero growth demand or not. It will be interesting to see what the fed does on inflation. Cost certainty or liquidity?

 

[Joe Schmoe]

We can all spend our "economic stimulus" checks buying gas. The cheapest where I live is currently $3.40/gal.

 

[stratman]

Not surprisingly the interest rate cut rallied gold which had dropped ten percent during the technical rally. The technical rally should continue as the drops have been on low volume while the rallies have had moderate volume. It appears a strong support level of 12,800 has been established. I would not be surprised to see a rally in the 13,400 range in May. The weak dollar will keep oil prices high for us weakened recession/near zero growth demand or not. It will be interesting to see what the fed does on inflation. Cost certainty or liquidity?

I figure liquidity.

 

[haraldo]

What's the interest rate like over there now?

Over here it's been raised over and over and over and over again, and now because of high interest rates, the real estate market has come to a complete stop. Impossible to sell our DARN house !!!!!

 

[aberkowitz]

The Fed should have stopped cutting rates two or three cycles ago. With the economy in its current state incremental rate cuts come with very little benefit- both economically and psychologically. Rates will remain ridiculously low for the next 12-18 months while the economy recovers, and people will again take advantage of cheap credit to continuously borrow- which will restart the same cycle that we just came out of. At some point soon the Fed needs to start raising rates to find that equilibrium where credit is easily obtainable but doesn't promote irresponsibility.

 

[rnatalli]

The Fed should have stopped cutting rates two or three cycles ago. With the economy in its current state incremental rate cuts come with very little benefit- both economically and psychologically. Rates will remain ridiculously low for the next 12-18 months while the economy recovers, and people will again take advantage of cheap credit to continuously borrow- which will restart the same cycle that we just came out of. At some point soon the Fed needs to start raising rates to find that equilibrium where credit is easily obtainable but doesn't promote irresponsibility.

Bingo. The Fed is being bullied by Wall Street and Main Street will be just as responsible. Plus, the rate cuts were too close to each other. You have to give a cut time to work. The economy doesn't change direction overnight.

Haraldo, the current overnight rate is 2% in the US.

 

[stratman]

What's the interest rate like over there now?

Over here it's been raised over and over and over and over again, and now because of high interest rates, the real estate market has come to a complete stop. Impossible to sell our DARN house !!!!!

Federal Funds 2%--IMO way too low, like Berkowitz said they need to find a balance.

 

[stratman]

You know, the high end real estate has been moving steadily, if you have money, you can pick up some nice deals down here, even though mid to lower end properties have adjusted to the rest of the nation in terms of value, there are plenty of fire sales going around. If interest rates stay low it'll entice investors with the cash to handle the mortgage debt.

 

[MUDSHARK]

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080501&id=8571658

 

[stratman]

"NEW YORK (Reuters) - Exxon Mobil Corp on Thursday posted a $10.89 billion first-quarter profit but the results still disappointed investors as weak production and low refining margins took some steam out of profits from record-high crude prices."

Listen, I'm a capitalist, small business owner and a billion percent for free enterprise, but that statement is just disgusting! How much is enough? Greed, just plain ol' greed, they're all making money by the barrels (no pun) and they're still disappointed?!!!


I love this:

Sen. Hillary Clinton (D-NY), a presidential candidate, earlier this week said Exxon "made out like bandits" with their $40 billion profit in 2007. "Middle-class families are paying too much and oil companies are not paying their fair share," she said.

She would love to nationalize the oil companies! By the way what's their fair share? Yo! Billary, last time I checked we live in a capitalist nation.

 

[haraldo]

"NEW YORK (Reuters) - Exxon Mobil Corp on Thursday posted a $10.89 billion first-quarter profit but the results still disappointed investors as weak production and low refining margins took some steam out of profits from record-high crude prices."

Just one thing comes to my mind: DISGUSTING

 

[MUDSHARK]

Bear in mind that the revenue was about 117 billion for a gain of about 9.3%. Of course, one must buy into intangible drilling costs and cost depletion as real hard costs.

The share price is about $90 with earnings per share of $2.14 (annualized 8.56) for a return of 9.5%. Price would be 10.5 x earnings still pretty fairly priced. The street, looking for 15% ROI likely was expecting 12 billion in net income. The amounts seem excessive but Exxon is a huge company.

 

[jonnythan]

We can all spend our "economic stimulus" checks buying gas. The cheapest where I live is currently $3.40/gal.

32 cents cheaper than here.

 

[Rickster71]

I love this:

Sen. Hillary Clinton (D-NY), a presidential candidate, earlier this week said Exxon "made out like bandits" with their $40 billion profit in 2007. "Middle-class families are paying too much and oil companies are not paying their fair share," she said.

What does Ms Clinton know about the middle class?
The Clinton's "made out like bandits" and made $109 million over the last eight years.
$109 Million, for what?
It's true, the oil companies are ripping us off; at least they are producing something useful.
The Clintons... not so much
http://www.nytimes.com/2008/04/05/us/politics/05clintons.html?pagewanted=1&hp
Limousine liberals, you gotta luv em.

 

[Mort Corey]

Ten billion in a quarter to provide as useful product is a bargain. What do you get from Washington that spends that in a day? In some respects, based on the world set price, gas is still pretty cheap.....since the major oil companies mostly buy it at market prices these days. $116 for a 42 gallon barrel works out to $2.76 a gallon. Tax, regulations, refining, shipping, etc, etc and four bucks ain't really too bad.

Bernanke on the other hand, is an idiot.

Mort (who read part of the idiot thread and just had to call someone that )

 

[stratman]

Ten billion in a quarter to provide as useful product is a bargain. What do you get from Washington that spends that in a day? In some respects, based on the world set price, gas is still pretty cheap.....since the major oil companies mostly buy it at market prices these days. $116 for a 42 gallon barrel works out to $2.76 a gallon. Tax, regulations, refining, shipping, etc, etc and four bucks ain't really too bad.

Bernanke on the other hand, is an idiot.

Mort (who read part of the idiot thread and just had to call someone that )

Is it me or is Bernanke lost? If these rounds of interest slashing continue, it can whip back into an inflation, then Bernanke will have to second guess himself and raise rates by double digits!

 

[rnatalli]

The Fed is being bullied by Wall Street and Main Street will be just as responsible.

Oops, I meant irresponsible.

Oh yeah, Bernanke is an idiot.

 

[aberkowitz]

Is it me or is Bernanke lost? If these rounds of interest slashing continue, it can whip back into an inflation, then Bernanke will have to second guess himself and raise rates by double digits!

I don't think he's lost per se, I think the job has changed drastically over the years to the point where every decision the Fed Chair makes is examined by a public with no knowledge that expects immediate results. While the position used to be about making hard economic decisions that would be scrutinized by the experts, today it is totally a PR job that gets scrutinized by every J6P who thinks they can do better. We became spoiled by the mid-90s when the public started to notice the short term effect a rate raise/drop could have on the stock market. Economic policy is made with a 12-18 month timeframe, but in a 24/7 news cycle world Bernanke's decisions are being criticized every 12-18 seconds.

 

[Mort Corey]

Though policy decisions may be made with a 12 to 18 month outlook, I think I've seen quite enough since just last September with helicopter Ben adding "liquidity" (ie more money)....the only thing that costs less since this Greenspan clone started cutting rates is a dollar....and that's because the marekt is flooded with the stuff. The Federal Reserve ought to be abolished and Bernanke sent back to Princeton (or McDonalds if he wanted to be useful)

Mort