| Fed rate cuts don’t come without economic risks
That would jolt Wall Street, businesses and people.Falling rates mean dwindling returns on savings accounts, certificates of deposits, money market mutual funds and other savings products. That is especially hard on older people, retirees and others on fixed incomes. They could face a double whammy if lower rates sparked inflation.Low rates, over time, could lead some people to live a lifestyle that they cannot afford. "You could see a restart to some of the behavior that was so prevalent just a couple of years ago, where borrowers were relying on home equity lines of credit and other inexpensive forms of credit to fund their discretionary spending," said Greg McBride, senior financial analyst at Bankrate.com.Short-term adjustable-rate mortgages could become much cheaper than longer term fixed-rate mortgages if the interest rate-cutting campaign continues.
Multinationals Drive Rebound on IBM`s Strength
The Nasdaq Composite Index was up 38.36 points, or 1.57 percent, at 2,478.30. The rebound came after the S&P 500 posted its fourth-worst start of the year in the history of the benchmark index. At the end of last week, charts showed stocks at their most "oversold" levels since 2005. Adding to the upbeat tone, Credit Suisse raised U.S. equities to "overweight" for the first time this decade, saying the United States has historically outperformed when leading economic indicators fall "because the speed of macro and corporate policy response is best there." IBM's shares rose 5.4 percent to $102.93 and made up about 40 percent of the Dow's advance. Other blue-chip tech stocks also gained, including microchip maker Intel Corp, up 5 percent at $23.08 and computer and printer maker Hewlett-Packard, up 2.5 percent at $46.13.
The Curse of Zog?
Won't Get Fooled Again? Zogby's poll right before the New Hampshire primary showed Obama with a 13 point lead. ... Zogby's poll for Saturday's South Carolina primary shows Obama with a 13 point lead. And falling. I'm just sayin' ... P.S.: Remember, a "Bradley effect" is possible among black voters as well as white voters. ... Update--Would you lie to a robot? I would! Mark Blumenthal analyzes the diverging (but not all that much) S.C. polls, including the Clemson poll with its huge (36%) undecided result. He's skeptical of a Bradley Effect, noting that if voters lie to polltakers when they say they're going to vote for the black candidate, you 'd expect them to tell the truth to automated polls: If the Bradley/Wilder effect is operating, we would expect to see it on surveys that use live interviewers, but in this case, the lack of an interviewer seems to work in Obama's favor.
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