How can a quarter of a point make a difference?

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Parrotpaul
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How can a quarter of a point make a difference?

Post by Parrotpaul » Mon Jun 08, 2015 12:51 pm

Would someone kindly explain why the Feds possible interest raise of probably 25 basis points causes such a scare and panic for the talking heads on CNBC? They have been panicked for months...WTF...25 basis points?

BTW... profits for the first quarter really aren't setting records, guys.
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afan95
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Re: Looks like Brooke was on to something..

Post by afan95 » Mon Jun 08, 2015 1:05 pm

Part of the reason might be that raising interest rates increases the cost of money so companies can't invest in new technology, etc AND they also won't be able to buy other companies which in many cases raises their stock price.
Can't find the article now but read it about 2 weeks ago. It was actually about how not raising interest rates has had more of a negative effect on the middle class than raising interest rates. Their position was that the middle class were the individuals who lost jobs when there were mergers/buyouts. Because the cost of capital to pay for acquiring another company was so cheap, that's what has given companies the opportunity to go ahead and be able to afford the transaction. When there are mergers/buyouts, the jobs lost are typically middle class jobs due to consolidation of operations. Also, many in the middle class are not in the position to put their money in stocks with the potential to lose that money. So with the low interest rates on savings and CDs, they can't really get much when trying to save money.
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Parrotpaul
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Re: Looks like Brooke was on to something..

Post by Parrotpaul » Mon Jun 08, 2015 1:30 pm

afan95...we're talking .25% raise from zero.... hardly the stuff of a market meltdown like the heads on CNBC would like you to believe.
"I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education." John Locke

afan95
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Re: How can a quarter of a point make a difference?

Post by afan95 » Mon Jun 08, 2015 2:24 pm

I offered an opinion and an article.
Since I don't deal in billion dollar transactions, .25% wouldn't kill me. But when you're talking billions, it obviously does.
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Parrotpaul
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Re: How can a quarter of a point make a difference?

Post by Parrotpaul » Mon Jun 08, 2015 3:09 pm

OK...if the average Joe on the street isn't impacted that much... why all the panic from the financial gurus... protecting their own jobs maybe?
"I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education." John Locke

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Omar Bongo
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Re: How can a quarter of a point make a difference?

Post by Omar Bongo » Mon Jun 08, 2015 3:57 pm

This is TV, Paul. You get "eyes" by scaring or titillating people. It's not rocket science.
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Parrotpaul
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Re: How can a quarter of a point make a difference?

Post by Parrotpaul » Mon Jun 08, 2015 4:07 pm

Ain't that the truth...
"I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education." John Locke

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Troglodyte
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Re: How can a quarter of a point make a difference?

Post by Troglodyte » Tue Jun 09, 2015 11:31 am

Paul wrote; "OK...if the average Joe on the street isn't impacted that much... why all the panic from the financial gurus.."

It's one thing to accept creeping disaster by getting used to it a piece at a time, while swallowing government Kool Ade. It's another for people who look at the big picture and see where all this is headed.. :-k
The average Joe is being impacted by fewer middle class jobs, higher prices and taxes, and less opportunity to get ahead.. The financial gurus see the economy spiraling down in flames the more our politicians "help" it..
I'd kinda listen to the gurus a lot closer than the government spin doctors...
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Wabash
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Re: How can a quarter of a point make a difference?

Post by Wabash » Tue Jun 09, 2015 11:51 am

It's like the fluctuations in gas prices.

Folks get used to low prices. Then act indignant when prices go up.

Low prices and rates are part of our capitalist system. They are no more an entitlement than high prices.
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Troglodyte
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Re: How can a quarter of a point make a difference?

Post by Troglodyte » Tue Jun 09, 2015 12:01 pm

Ah so.... Supply and demand.... Wabash, you're gonna get kicked out of the Hillary fan club and socialists are us. :lol:
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Wabash
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Re: How can a quarter of a point make a difference?

Post by Wabash » Wed Jun 10, 2015 7:06 am

I believe in supply and demand setting prices. I believe in competition. Something American corporations claim to embrace but really don't.

They hate competition.
They told me if I voted for Hillary Clinton the president would be emotional, impulsive, and unpredictable. They were right. I voted for Hillary Clinton and got a president that is emotional, impulsive, and unpredictable.

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Troglodyte
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Re: How can a quarter of a point make a difference?

Post by Troglodyte » Wed Jun 10, 2015 8:17 am

Ah so... The competition to eliminate the competition... :lol: That's really competitive.....
The ideal that is impossible to keep, if you ever get it.. Survival of the fittest... Progress...
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Wabash
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Re: How can a quarter of a point make a difference?

Post by Wabash » Wed Jun 10, 2015 8:58 am

You would have a point if business didn't actively engage government to help it block competition.

Which it does, frequently.
They told me if I voted for Hillary Clinton the president would be emotional, impulsive, and unpredictable. They were right. I voted for Hillary Clinton and got a president that is emotional, impulsive, and unpredictable.

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Parrotpaul
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Re: How can a quarter of a point make a difference?

Post by Parrotpaul » Wed Jun 10, 2015 12:23 pm

Not to mention the notion that the bigger the business, the more they support government regulation... something few would ever admit. Its like a recessive tax...more regulations have a larger impact on the smaller businesses cost of doing business much more significantly than businesses with deep pockets. On the other hand, regulated businesses enjoy a kind of security blanket unregulated businesses don't have.
"I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education." John Locke

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