by Calculated Risk on 9/18/2007 08:29:00 PM

Update: From the Financial Times: Bank acts boldly to avert recession risk (hat tip Steve)

David Rosenberg, chief economist at Merrill Lynch, said it was hard to combat a deflating credit and asset bubble. He said that while markets soared when the Fed cut rates by 50 basis points in January 2001, they soon fell back.

The S&P 500 closed at 1,276.05 on January 2nd, 2001. The Fed cut rates 50bps on Jan 3rd. The S&P 500 closed at 1,347.56, up 5.6% for the day. Then the market started to sell off, falling almost 20% by March. Rosenberg is correct (doesn't mean history will repeat).

Bloomberg video has several interviews concerning the Fed rate cuts. Here is PIMCO's Bill Gross:

Click image for video.

Gross of Pimco Sees 3.75% as `Destination' for Fed Rate September 18 (Bloomberg) -- Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., talks with Bloomberg's Michael McKee from Newport Beach, California, about today's decision by the Federal Reserve to lower its benchmark interest rate by a half point to 4.75 percent, the first cut by the central bank in four years. (Source: Bloomberg)