Either a BLACK TUESDAY, or Emergency Cut

atticus · Jan 21, 2008

Quote from Thermactor:

we'll probably see dow break through the 12000 barrier tomorrow

Hey Captain Obvious! Do you have access to YM futures? 11,586 last trade.

gwb-trading · Jan 21, 2008

Quote from NY0BScalper:

Dow futs are down 500 points. indicating trading through the 11,500 barrier.

While the market is likely to open sharply lower. Many traders are going to be looking at the long side with the expectation that the fear is over-done.

atticus · Jan 21, 2008

Quote from Mvic:

100% correct, it has gone way beyong that point. It is now an issue of the faith in the viability of the credit market.

You can't go debit in a cash-account. Too many public LTCMs [or ICBMs, take your pick].

Pa(b)st Prime · Jan 21, 2008

Quote from atticus:

Cut is a bandaid for a bullet wound. It's not public, but ATT will be cutting head count by 10%. (sic) earnings are strong but built on mud. Why is it every egghead's assumption that growth tracks inversely-proportional to rates?

Throwing money at the problem with do nothing.

Exactly. Everything suggested has been tried for naught-in Japan. They've been leading everyone lower for months with the lowest rates in world.

I don't think a lot guy's respect the numbers. The mortgage market is bigger than the Treasury market. Jeeeez throw in stocks, corporate/muni debt issuance, (broke local governments are next) consumer and commercial credit and you're looking at asset devaluation in the tens of trillions. Any measure that would actually cure this wound would be so Argentinian that Gold will trade $2000 an ounce.

balda · Jan 21, 2008

So many threads proposing a rate cut.

So all the liquidity crises will disappear with 1% rate reduction?

Everyone who is being trapped on a long side over leveraged is pleading for a rate cut.

All it is going to do is make it worse. Every bull will try to get out on any bounce now. Is that good for the market?

Arnie · Jan 21, 2008

Seems to me, if Gentle Ben is going to cut before the Jan meeting, he will do so tomorrow am before the 9:30 open.

Personally, I think the guy is a clueless academician. He's the Fed's version of Jimmy Carter

atticus · Jan 21, 2008

Quote from Pa(b)st Prime:

Exactly. Everything suggested has been tried for naught-in Japan. They've been leading everyone lower for months with the lowest rates in world.

I don't think a lot guy's respect the numbers. The mortgage market is bigger than the Treasury market. Jeeeez throw in stocks, corporate/muni debt issuance, (broke local governments are next) consumer and commercial credit and you're looking at asset devaluation in the tens of trillions. Any measure that would actually cure this wound would be so Argentinian that Gold will trade $2000 an ounce.

Structurally very similar, although worse in the USA. A nation of savers vs. a nation of consumers rolling over their car financing. Oh yeah, it looks peachy.

crgarcia · Jan 21, 2008

Fed meeting is just around the corner, why would the Fed do an emergency cut now?

Pa(b)st Prime · Jan 21, 2008

Quote from atticus:

Structurally very similar, although worse in the USA. A nation of savers vs. a nation of consumers rolling over their car financing. Oh yeah, it looks peachy.

Oh I agree...much worse. At least they have a balance of payments keeping them afloat. Hail Toyota.

Ticketwatcher · Jan 21, 2008

Quote from JJ2000426:

TicketWatcher:

They could totally lose control and a cut will no longer do any good.

<p>I think that statement sums up the present not the future. I do not think a rate cut will do much to affect the next leg down what ever distance that is. He has lost control and foreign markets have shown that. I understand that foreign markets are indicating something much worse than a 200 point down day, but markets are contrary things and do not often follow the expected. If they gap down on the open far enough, there is always the chance capitulation can be reached sometime in the morning and they can reverse off the lows in the afternoon. An emergency rate cut at this point will only allow smart money to sell off their positions into some strength instead of holding on until capitulation. The bottom is the bottom and the fed can only delay it a little.