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Motley Fool Hidden Gems Investing

Motley Fool Money: 02.19.2010

Motley Fool Hidden Gems Investing

The Motley Fool

Business, Investing

4.33.1K Ratings

🗓️ 19 February 2010

⏱️ 39 minutes

🧾️ Download transcript

Summary

The Fed hikes the discount rate. The stimulus package celebrates its first birthday. Abercrombie & Fitch exposes itself. And Comcast rebrands itself. On this week's Motley Fool Money Radio Show, we discuss those stories, share three stocks on our radar, and talk with Whole Foods co-President and COO Walter Robb. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Everybody needs money. That's why they call it money.

0:08.0

From full global headquarters, this is Motley Fool Money.

0:19.0

Welcome to the show. Thanks for being here. I'm your host Chris Hill.

0:22.0

And I'm joined by Motley Fool, Senior Analyst, Seth Jason, James Early, and Shannon Zimmer.

0:27.0

Good to see you. Good to see you Chris.

0:29.0

Coming up, we'll talk with the Chief Operating Officer of Whole Foods.

0:33.0

We'll take sides in the Southwest Airlines Kevin Smith's Smackdown.

0:37.0

Take issue with Comcast's new name, and as always, give you an inside look at the stocks that are on our radar.

0:43.0

But we begin with the Fed's decision on Thursday to raise the discount rate by a quarter point to 0.75%.

0:49.0

Now guys, this is the rate the Fed charges banks that borrow from the Fed.

0:53.0

So what does the hype mean for investors, James Early?

0:55.0

Chris, let me give you the official version. The discount window is long wind the lender of last resort for banks.

1:01.0

A sign of desperation. Traditionally, banks didn't use it much. That changed during the financial crisis because of some special terms.

1:07.0

And now the Fed says it's not turning to do anything big here. It's just returning things to normal, raising the rate a little bit and shortening the repayment window.

1:15.0

All right, here's the unofficial version. So James is exactly right. It's a small incremental move, but the symbolism of it is absolutely huge.

1:21.0

And in that sense, it's a bit of a bold move. They're beginning to mop up liquidity.

1:25.0

And so that the days of easy money are over, despite the fact that small businesses and consumers are still having difficulty getting credit.

1:33.0

So you've got double-digit unemployment. You've got a housing foreclosure crisis that's still underway.

1:37.0

A meltdown in commercial real estate. And the Fed's choice, small though it is right now, is to err on the side of mopping up liquidity. It doesn't make a lot of sense.

1:43.0

Although it does strengthen the dollar, which has pros and cons.

1:47.0

For those traveling to Europe, yes.

1:49.0

All right, on Thursday, the government reported that the PPI, the producer price index in January, increased by 1.4%, which was higher than expected.

...

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