Wall St. Soars on Hopes of Rate Cut
Fed Official's Speech Notes Risk of Slump
By Neil Irwin
Washington Post Staff Writer
Thursday, November 29, 2007; D01
A top Federal Reserve official yesterday acknowledged that a downturn in financial markets over the past months has increased the chances of a serious economic slump -- and the stock market soared, as investors took his words to mean that the central bank will cut a key interest rate further.
The Dow Jones industrial average rose 331 points, or 2.6 percent, on top of a 1.7 percent rise Tuesday. That makes for the best two-day span for the Dow in five years, though it is still down 6.2 percent since an October high.
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The chief economist over at Bank of America is named Mickey and one has to restrain the temptation to tag him Mouse for a last name.
"The Fed is saying it will ease as necessary to restore order to the financial markets and avoid a recession," said Mickey Levy, chief economist of Bank of America.
Every possible economic indicator is in the dumper
- the dollar has fallen by half in value
- national debt has been tripled in six years
- the fallout from sub-prime crime has not yet been checked
- investors are avoiding America and turning elsewhere
- yearly balance of payments are the worst in 40 years
- the 3rd-worlding of America to haves and have-nots is in full swing
The market sucks. Those who find consolation in rumors of mythical band-aids are deluded. Mickey Levy or not, it has become a Mickey-Mouse economy. An international monetary crash is so close you can smell its breath.
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