9/1/2008By CHRIS MCMAHON
The Federal Reserve Bank cut 325 basis points from the Fed funds rate from September 2007 through April of this year in an effort to stimulate our flagging economy and to shore up the banking industry in the face of subprime related fallout. The effort may have staved off full blown recession, however it has accelerated inflation and undercut the value of the world’s reserve currency. The outgoing administration of George W. Bush has spent nearly two full terms in a state of denial regarding the weakening U.S. dollar. The U.S. dollar index has declined from a high of 1.2190 in 2001 to trade consistently below 0.7500 for most of this year. Now there is growing concern that sovereign governments, ever more squeamish about the erosion of their massive dollar holdings, could lighten their positions further if steps aren’t taken to bolster the greenback.
9/1/2008By CHRISTINE BIRKNER
After a cruel summer for speculators, Congress rejected two bills that would have limited speculation in the commodity markets before it left for August recess. On July 25, the Stop Excessive Energy Speculation Act of 2008 failed to receive the required votes for continued consideration by the Senate. The bill came under fire from the Coalition to Protect Competitive Markets, an organization made up of exchanges and industry advocates. The coalition said that the bill would have “drive[n] commodity trading overseas, rather than providing long-term solutions to our energy needs.”
As a result of what it called “a substantial threat of sudden and excessive fluctuations of securities prices and disruption of the functioning of the securities markets,” the Securities and Exchange Commission (SEC) introduced an emergency rule to curb short selling of stocks of several major financial firms on July 15 and later extended that order until Aug. 12. The rule restricted naked short selling of Freddie Mac, Fannie Mae and 17 investment banks. The SEC said it would “eliminate any possibility that naked short selling may contribute to the disruption of markets in these securities.”
Sorry, the May I-Trade show on-demand period is now over. But stay tuned for our December I-Trade show. Watch this space for dates and speakers.
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