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Yes, they can and they already have, by using mortage securities in this latest intervention. But they directly control only the discount rate in the rates arena, and can target the Fed Funds rate by doing things like what they did on Friday. They can also raise and lower reserve requirements...

Hydroblunt, I supported the Fed Funds trading desk at a very large bank for many years (since the Fed never closes, as all Fed Funds traders know, I spent many a New Year's Eve, including the one for Y2K, on the trading floor), so believe me I know what I'm talking about here. If you read my...

No one is looking to save the CDS market. All anyone is looking to do is prevent the subprime mess from causing a total freeze-up of all of the markets. Unless you actually want economic armageddon, throwing some money into the interbank market, and lowering the Fed Funds and ECB target rates...

The point of pointing at the 10 year was to show that inflation obviously isn't concerning the buyers of these instruments. Away from Treasuries, obviously, credit risk has gone up, so interest rates will respond by going up as well. At no point have 10 years traded above Fed Funds since that...

Voted "No". They're too dumb to understand what's going on and do the right thing, especially since Bernanke appears to be in a competition with Trichet for terminal idiocy. The last Fed statement already proved that if they hit a post with a car at 3am in the morning, it'll be a meeting of...

Oh Lord. Selectively cherry-picking your facts doesn't make a case. The only rates that spiked on Thursday and Friday were the shortest-term rates, and that only for the interbank market. This was strictly because, once BNP announced their troubles, all the banks began to pull back from the...

The next few years are going to be a trader's dream, IMO. I figure where we are is analogous to the late sixties, and what happened to the market over the next few years after that was increasing volatility as the market topped and then finally got cut in half in 1973 and 1974. Attached is...

Heh. May your generosity never lead you to poverty.

Stoopid question: is Gainskeeper easily linked to/available on their site?

Gold and gold stocks have been holding up, and today, finally, they traded counter to the trend of the market. When you saw gold pop this morning, the correct reaction was to cover into the morning sell-off, and go long. It meant the Fed was in there somewhere. I had calls on the VIX; I sold...

Well, for some of us, going flat is part of the system. I tested mine to death, and decided, after probably singeing my long-suffering motherboard, that there was simply no way that, if volatility short-term rose above a certain level, I was ever going to make money. So, since the 20th, I've...

Exactly. Bretton Woods II needs to end. The pain will be awful, but the end result will be far better than what will happen if we follow the road of people like Paulson who have, to put it bluntly, "gone native". The first item on this Admin's economic agenda should have been China and their...

Mayhaps you might want to post some evidence of the markets backing up your fantasy assertions??? Like, maybe, bond traders bidding up the long stuff in response to the Fed being easier than a Baltimore whore? But...the evidence doesn't exist, does it? Sorry, didn't mean to introduce you to...

....which is why the 10-year barely moved while the Fed took Fed Funds from 1% to 5.25%???? Yes, you have bigguns. We're impressed. Go sell it somewhere where more than three dawgs get kilt when the front porch collapses.

Just to raise the bar in this thread a little, the bonds probably haven't moved much because these were off-balance sheet vehicles, and therefore leave the main company untouched. Bear did promise to back one of the funds, but it wasn't a statutory or fiduciary obligation for them to do so...

Strictly for entertainment: I actually interviewed a guy for a position today, from AHM. My jaw hit the floor and bounced when I pulled up his resume and saw the last place he worked for. And, to complete the irony, the position we're interviewing for involves....drum rolls please....risk...

All true. However, think of this as a correction in reverse. It's not over until the shorts (that's you guys) feel major pain. Far as I can tell, the shorts are still happy as pigs in .... well, you know. Of course, I'm saying this from the sidelines (I got out on the 20th of July and have...

Drock409, excellent, to the point. Thanks.

I look at gold and gold stocks to gauge the chances of a Fed cut in times like these. For the past month, unlike what happened around Feb 27, gold and gold stocks have handily, and more importantly, consistently outperformed the stock markets. So, the chances are getting somewhat better for a...

Serious question: I'm flatter than a Midwestern prairie, partly because LEH seems to crap out even more than BSC every time something awful hits the wires (run a 3 mth comparison chart on these two and you'll see what I mean). I figure some sympathy selling would be appropriate, but this is...