Update Market has been open for four minutes, Dow down 439… NASDAQ down 118.
Update 2 Market open 15 minutes, Dow down 369 … NASDAQ down 78.
Update 2 Later, markets recovered for now, DOW down 50 … NASDAQ down 23.
People are nervously waiting for the stock market to open. So the Federal Reserve made and “emergency” 3/4 point drop in interest rates. This is a very big drop.
The backdrop: stocks around the world plunged yesterday while our market were closed for the Martin Luther King holiday.
Stock markets across Asia plunged even farther and faster on Tuesday than they had on Monday, as anxious sellers dumped huge numbers of shares on worries that an economic slowdown in the United States could drag down growth around the world.
. . . The Japanese stock market dropped 5.7 percent, for the worst two-day loss in 17 years, while the Australian stock market tumbled 7.1 percent, its worst single-day loss in nearly two decades. The Shanghai market lost 7.2 percent while the Hang Seng index in Hong Kong plummeted 8.7 percent.
Inflation is running at 4.1% and the Fed’s interest rates are now 3%. The Fed will PAY banks 1.1% to borrow.
What this means: bailing out the stock market by dropping the dollar, increasing inflation nd trying to trigger an asset bubble like the bursting housing bubble. Remember, it was ridiculously-low interest rates that caused that bubble.
By the way, I’m not sure if I have mentioned this: Do not leave any money in “money-market funds” right now. Make sure that your money is in FEDERALLY INSURED ACCOUNTS. ‘Federally’ is the key word there. And learn the rules on how much you can have in any accounts and still be insured.