But cheaper rates will act to help calm the investors nerves. Afterall that is what it is all about, the investors, not the financial health of the people.

There seems to be a debate going on inside the FED on what to do about the economy.


NEW YORK (Reuters) - Federal Reserve Bank officials said on Monday financial turmoil has increased risks facing the U.S. economy, but comments by others suggested there was still debate about how quickly the central bank would need to act.

The main threat is that the downturn in the housing market would hurt consumer and business spending, Fed Governor Frederic Mishkin told a group of investors.

"Economic activity could be affected more severely in other sectors should heightened uncertainty lead to a broader pullback in household and business spending," Mishkin told the Money Marketeers of New York University.


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The makets aren't sure which way the feds will jump. The next few days will tell how they react to the latest feds statement.

Markets are up for the day, but will it be enough to calm the nerves of investors?

They are on a rollercoaster ride right now. They still don't have much good news to be happy about where economic indicators are concerned.

We will see, I think it is next week that the Fed will make an announcement. The rollercoaster ride will continue til then. Yesterday the markets were down about 16 pts.

Making a case for Prime cuts.


Ongoing weakness in the housing market could push the economy to the brink of a recession, economic forecasters warned yesterday.

But the dire outlook was tempered by the belief that growth in other areas should put the country back on a slow road to recovery by 2009.

The quarterly UCLA survey predicts growth in the gross domestic product of just over 1% for the fourth quarter of this year and first quarter of 2008.

A separate study by The Wall Street Journal found economic forecasters boosting the odds the U.S. will slide into recession in the next 12 months.

Economic growth will remain "tepid" in 2008 and return to 3% in 2009, said David Shulman of the UCLA survey. That growth is just above the traditional definition of a recession - two consecutive quarters of decline in gross domestic product.


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But the dire outlook was tempered by the belief that growth in other areas should put the country back on a slow road to recovery by 2009.

These long range forcasts are BS.IMO. Given world events they are grasping at straws.

AQ cut in Prime will help very few mortagage hjolders, but it would do wonders for the investors, you know those with more money that conscience.

Jobless claims raising.


The number of workers filing initial claims for jobless benefits increased slightly last week despite expectations of a surge from recent layoffs in the financial-services industry.

Jobless claims rose to a seasonally adjusted 319,000 for the week ended Sept. 8, up 4,000 from a week earlier, the Labor Department said yesterday. The four-week moving average, which smoothes out weekly volatility, dropped by 1,000 to 324,000.

Continuing claims fell by 6,000 to 2.585 million for the week ended Sept. 1, but remain relatively elevated and suggest continued softness in hiring conditions.


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Labor statistics can be decieving at times. There are a lot of factors that get overlooked when looking at their figures like how many seasonal jobs are involved, number of government jobs that were created, and types of jobs lost and types of jobs created.

The government can manipulate the job stats at times to create the appearance of a good job market.

I agree, all stats are manipulated to fit the position. It is just easier for economist to do it.

More discouraging news--look a bit more bad than first thought.


Retail sales and industrial output both slowed in the US last month, as the economy felt the strain from the housing slump and credit squeeze.

Shop sales grew 0.3% in August, below market expectations of a 0.5% rise and below July's 0.5% increase.

Industrial output rose 0.2%, the slowest pace in the past three months.

Analysts said the figures reinforced the case for the Federal Reserve to cut interest rates when it meets to decide on borrowing costs next week.


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In a piece of more positive economic news, the US balance of payments deficit narrowed to $190.8bn in the second quarter from $197.1bn in the previous three months.

Wow. Break out the champagne.

They gotta find something they can say is a positive sign, no matter how little it is, they will see a positive reaction to all fiscal policies. Manipiulation!