Quote:
Originally Posted by BBKing
The US Federal Reserve has cut interest rates a colossal 0.75%, biggest cut since 1982. Seriously big. One problem with this is the Monty Python Messiah Theory - if there's nothing to worry about ('I'm not the Messiah') why are you panic cutting interest rates ('Only the true Messiah denies his divinity')? Could have the opposite effect, but it will also drop the dollar right in the doo-dah, and thus reduce relative oil prices. On that note, it increases the incentive for oil nations to move to the nice, stable Euro, where you only have to deal with Sarkozy'n'Merkel, not the fag-end of the Bush disaster.
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According to what I've just heard on the BBC financial news it seems that the timing and magnitude of the huge US rate cut could well have been in large part due to the serious fallout from the Soc Gen debacle. It appears the French and European authorities didn't think it at all necessary to let the Federal Reserve know about the problem and the Fed may have panicked just a tad....