Fear that Fed's action is sign it knows of lurking danger

會不會真的是這樣的呀? 那壞事還在後頭.

From The Times
August 18, 2007
Fear that Fed\'s action is sign it knows of lurking danger
Suzy Jagger in New York

Fears that the US Federal Reserve’s hand was forced by evidence of a serious funding shortfall in a big Wall Street institution saw the Dow Jones industrial average swing within a 320-point range within the first two hours of trading yesterday.

While Wall Street\'s equity markets surged after it emerged that the US central bank had unexpectedly cut the short-term interest that it charges to banks by 0.5 percentage points, traders were still anxious about the continuing fallout from the sub-prime lending crisis.

Carl Weinberg, of High Frequency Economics, said: “I’m nervous. I am worried that the Fed knows something we don’t. I’m worried there’s a particular institution out there that can’t service a customer and that’s why we got this rate cut.”

Although bank stocks were among the biggest gainers — with Citigroup, the world’s biggest bank, surging 4 per cent and Lehman Brothers, the investment bank, up 5 per cent — the exposure of the big Wall Street banks to tightening credit and their ability to withstand the pressure were still at the centre of investors’ concerns.
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Bear Stearns, the US investment bank, which ran two hedge funds that collectively ran up losses of $1.5 billion (£756 million), saw its shares bounce 13 per cent on rumours that it was close to securing a rescue financing package from an investor.