CHESSNOID

The economy is crumbling and the Republican White House, the Democratic House and Senate, the US Treasury, and the Federal reserve are doing everything to continue to muck it up.  A mild  recession that was both forecasted and expected by many were made worse by all these organizations.  Unlimited deficit spending, artificially lowering rates, pumping unlimited amounts of cash into the system, and bailout after bailout and more on the way are all contributing this severe recession.

Tomorrow, it is expected the feds will drop rates AGAIN.  One of the reasons that caused the housing market to bubble into atmospheric levels was because of the multiple rates from the early 2000s. The bubble has burst and the economy is at its weakest and the solution the feds want is to lower it again to even lower numbers never seen!  Bloomberg:

He predicted the benchmark rate will be cut by half a point today, matching the median forecast of economists surveyed by Bloomberg News. Bernanke and his team could push borrowing costs to zero by June if the credit crunch intensifies, Gertler said.

The Fed has already cut the benchmark rate from 5.25 percent in the past 13 months and created six lending programs channeling more than $1 trillion into the financial system. Banks are still reluctant to lend to each other and the Standard & Poor’s 500 Index is down almost 36 percent this year, even after yesterday’s surge.

The FOMC is scheduled to announce its decision on rates at about 2:15 p.m. in Washington.

I expect it to be another up day for stocks tomorrow with this expectation. I don’t think the profit taking will overcome the optimism. Right now, it looks to open down but I expect we will break the unusual up only one day at a time pattern we have been having this month. I don’t think any unexpected bad news will scare investors tomorrow. Of course, all we can do is watch it unfold.