12/11/2007:Federal Open Market Committee可以随便改变wording?

12/11/2007:Federal Open Market Committee可以随便改变wording?

Dec. 11 (Bloomberg) -- The Federal Reserve will probably cut interest rates today and lay the groundwork for more to prevent the economy from sliding into recession.

The Federal Open Market Committee will be loath to repeat language from its last meeting that risks between inflation and growth are ``roughly'' balanced, economists said. Keeping the phrase would open officials to criticism they're oblivious to the credit squeeze that's threatening growth.

``They pretty much tried to draw a line in the sand by going to a balanced-risks statement at the last meeting, and now the world's changed,'' said Keith Hembre, who used to work at the Fed and is now chief economist in Minneapolis at FAF Advisors Inc., which manages $105 billion. Officials will ``leave themselves the opening'' for further cuts, he said.

Chairman Ben S. Bernanke is trying to steer through the housing recession that entered its third year and alleviate a jump in borrowing costs for companies and consumers. The FOMC will lower the benchmark rate by a quarter point to 4.25 percent, according to 115 of 124 economists surveyed by Bloomberg News. Seven anticipate a half-point move and two see no change.

Officials may also enhance their efforts at providing a backstop for bank funding amid a surge in demand for cash, some economists said. Options include reducing the charge for direct loans to banks by half a point, to 4.5 percent.

Most Since Recession

The Fed, which began meeting at 8 a.m. in Washington, is scheduled to announce its decision at about 2:15 p.m. A quarter- point rate cut, after 0.75 percentage point of reductions in September and October, would mark the greatest easing of borrowing costs since the last recession in 2001.

Bernanke and Vice Chairman Donald Kohn recognized in speeches last month a deterioration in credit markets that jeopardizes lending to businesses and consumers, threatening spending. That was a shift from the Oct. 31 statement, when officials signaled they were reluctant to do more. (几天之内就可以改变看法?是game?是有意还是无意?美联储的这种游戏何时休？)

``The reality is, markets have gotten worse in a way they couldn't have expected, and they've gotten worse to a point where there are legitimate concerns that it will spill over to the macroeconomy,'' said Vincent Reinhart, who was Bernanke's chief staff adviser on monetary policy before leaving in September to join the American Enterprise Institute in Washington. ``Not acting would be too much of a surprise.''

Futures Trading

Traders estimate a 40 percent chance of a half-point reduction today, with a quarter-point fully discounted, according to futures prices quoted on the Chicago Board of Trade. (告诉我，怎么 futures prices可以得知Traders estimate a 40 percent chance of a half-point reduction？)

Richard Kovacevich, chairman of Wells Fargo & Co., the second-biggest U.S. home lender, said in an interview that he expects the Fed to cut the main rate by a quarter-point and the discount rate by a half to three-quarters of a point. Kovacevich represents the San Francisco Fed district on a bankers' council that advises Fed officials.

Economists including former Treasury Secretary Lawrence Summers and the chief U.S. economists of Morgan Stanley and Merrill Lynch & Co. predicted a recession in the past month as strains in credit markets increased.(一个月之内全转向了！recession需要至少18个月的确认，一个月的变化有关系么？)

``It's conceivable that we entered a recession in the fourth quarter of this year,'' said Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago and a former Fed economist. ``It's going to be a soft holiday sales season,'' he added, predicting the unemployment rate will climb to 5.6 percent next year from 4.7 percent last month. (划线的话有什么根据？是否一个月后又变了？)

The collapse of the U.S. subprime mortgage market has led Citigroup Inc., Merrill and other banks and securities firms around the world to write down about $76 billion of losses and markdowns this year.

Seven-Year High

Concern about the mounting losses diminished banks' willingness to lend cash to each other, sending funding costs higher. The three-month dollar London Interbank Offered Rate climbed to as high as 65 basis points more than the Fed's benchmark rate last week. That's the widest spread, except for on Sept. 18 when the Fed cut rates, in seven years.

Yields on two-year Treasury notes dropped as low as 2.79 percent on Dec. 4, the lowest since November 2004, as investors flocked to the perceived safety of government debt.

The scarcity of cash comes at a time when banks typically conserve funds to buttress balance sheets before closing their books for the year.

The Fed's New York branch said Nov. 26 it planned a series of repurchase agreements extending into 2008 to help fill cash shortages. Stephen Cecchetti, a former New York Fed research chief, said officials may consider further steps, such as extending discount-rate loan terms to 90 days, from 30. The outstanding loans rose to the highest since September last week.

`Grit My Teeth'

``If I backed myself into this position, I would grit my teeth and just cut, big time,'' said Cecchetti, who is now a professor at Brandeis University in Waltham, Massachusetts.

Some Fed officials indicated heightened concern inflation would quicken, before Bernanke and Kohn spoke two weeks ago. Philadelphia Fed President Charles Plosser said Nov. 27 that price expectations may increase because of the rate cuts. Kansas City Fed Bank President Thomas Hoenig dissented in favor of unchanged rates at the Oct. 30-31 meeting.

Any attempt to signal that inflation and growth risks are similar would be out of step with the Bank of England and Bank of Canada, which highlighted concerns about financial markets when they cut rates last week. The U.K. central bank on Dec. 6 echoed its Canadian counterpart from two days before in citing ``downside'' risks to consumer prices.

``Inflation risks are present, but it is very hard to argue they are on par with growth risks,'' said Brian Sack, senior economist at Macroeconomic Advisers LLC in Washington and a former researcher at the Fed. ``We'll see a more flexible message, more attuned to the downside growth risks.'' (Inflation已经是不争的事实！物价上涨，美元大幅贬值，美联储的目前的政策就是鼓励或故意使美元贬值，各大公司的writeoff/markdown都是通过美联储印发美元买单，从而引发通胀把损失转嫁到了国际美元储备持有者的身上！不要忘了美联储是私人机构，它代表美国的各大财团。)

Greenspan坦承他是在房屋市场泡沫化两年后才发现问题.美联储下面有一大堆专业的研究机构。关于一些问题的看法都会有比较明确的看法，而且会有详细的论据，即使看法事后被证明是错误的。

像这样几天之内改变关于加息减息这种异常重大决定的论调，唯一的解释就是故意误导市场。看看10/31日后的市场走势！

谁以为伯南克不如格林斯潘，就是天大的笑话了。这帮人长年累月在一起，都是半斤八两，谁上台不过是政治斗争的结果。罗杰斯不是出书公开指责格林斯潘从1999年起制造股市泡沫不过是为了挽救long term capital?还有其80年代上台没几天就弄了个87大股灾，然后为了保住美联储主席的职位而舔着脸到国会上下lobby?

股市是最肮脏也是最公平的地方！