F U Fed
- Thread starter pumpanddumper
- Start date
I don't understand what everyone is so pissed about. The news came on CNBC before the market opened and I'm sure that you heard about it around the same time that I did. This happens all the time when the FED does not like where the fed funds rate is at that particular moment. I will acknowledge that they did take in securities that they normally would not have taken in order to bring the rate back to normal, and I have one word for that:
SMART
What is happening is that we are in a liquidity crunch and not a normal market downturn. If you listen carefully, you will see that people have trouble VALUING these MBS's and so the funds have to post larger losses because their huge amounts of MBS's don't have values any more (making their value = 0). If I had an unbelieveable amount of cash right now, I would be picking up these things right and left and that is exactly what insti. guys like insurance companies are doing because these are a great long term play. There is nothing wrong with the underlying, it is simply a problem with valuation because no one wants them. If I had $10m sitting around, I would throw it into AAA rated bonds at $50, it's just sound long term investing.
SMART
What is happening is that we are in a liquidity crunch and not a normal market downturn. If you listen carefully, you will see that people have trouble VALUING these MBS's and so the funds have to post larger losses because their huge amounts of MBS's don't have values any more (making their value = 0). If I had an unbelieveable amount of cash right now, I would be picking up these things right and left and that is exactly what insti. guys like insurance companies are doing because these are a great long term play. There is nothing wrong with the underlying, it is simply a problem with valuation because no one wants them. If I had $10m sitting around, I would throw it into AAA rated bonds at $50, it's just sound long term investing.
well, una... i can agree to that.
joe investor tends to buy tops and sell bottoms when he trades.
but on a #'s basis, far more market money is DCA'd into mutual funds on a periodic (usually monthly) basis due to 401ks' etc.
the amount of money actively traded by joe investor pales in comparison to the amount DCA'd
joe investor tends to buy tops and sell bottoms when he trades.
but on a #'s basis, far more market money is DCA'd into mutual funds on a periodic (usually monthly) basis due to 401ks' etc.
the amount of money actively traded by joe investor pales in comparison to the amount DCA'd
Are you freaking out of your mind? you aren't angry! You don't pay taxes; do you?
You can't see that $38 dollar going down the drain. All these so called sub-prim bonds are rated AAA; and it is on defaults; no one can repay it; so government pick it up. Worst; all these money may have to pay some foreign investors too.
Hmm the $38 bln don't go into sub prime bonds, they offer short term loans to banks so the nation's leading banks continue clearing transactions among eachother at the FedFunds rate of 5.25% and not 6% (as they were Friday morning after the European fallout). Fed policy wants them to clear at 5.25%, so if the Fed sees the system is out of whack it temporarily borrows out funds to banks at the FedFunds rate to have the system revert to 5.25% instead of 6%. The money is not "lost", there is a 99.999999999999999% chance the Fed will get it back in X days with the 5.25% interest rate fee added on top.
Actually immediate action like this can save tax payers' money, because it can keep our finance system from completely freezing up which could eventually cause a global depression with many Joe Averages getting hurt.
The bulls sure bitch a lot when the one-way bull mkt just might be over. Does anyone know for sure? Thats impossible to know. But what we do know is that the game got a lot tougher lately for those that buy stocks only. We can see from many posts that many only know that "single tactic"..........and many call themselves "traders", tisk, tisk.
Fed intervention in mkts are NOT intended to change reality. If some traded currencies in the past, central banks intervene in mkts NOT to change the macro picture (they would go broke trying) but to punish the specs a couple times or so, the intention is to SLOW DOWN the run on a currency. We see the same thing in this slippery slope of slime from the crooks that screwed many a consumer into thinking the valve of a home would constantly rise and when the interest only payments came time to start paying principle and a higher rate of interest that the NEW equity in the home could be used as a downstroke etc to refinance............How cute was all that bs?
Anyway, this is not a rescue by the fed, it is a slowdown of whatever will be........good or bad. Intervention is intended to CALM the mkts, if they think they are rescuing the situation they are mistaken.
Bulls get a grip.........Do you fools really think stock prices will always go up....if so then maybe you bought one of those loans also. :eek:
No sense even getting into sterilized or unsterilized intervention.....it is all in a GOOGLE search. Have a good weekend all ......lets make a ton of bacon next week and keep up the volatility. but indeed we can do without the fed screwing up things.
Fed intervention in mkts are NOT intended to change reality. If some traded currencies in the past, central banks intervene in mkts NOT to change the macro picture (they would go broke trying) but to punish the specs a couple times or so, the intention is to SLOW DOWN the run on a currency. We see the same thing in this slippery slope of slime from the crooks that screwed many a consumer into thinking the valve of a home would constantly rise and when the interest only payments came time to start paying principle and a higher rate of interest that the NEW equity in the home could be used as a downstroke etc to refinance............How cute was all that bs?
Anyway, this is not a rescue by the fed, it is a slowdown of whatever will be........good or bad. Intervention is intended to CALM the mkts, if they think they are rescuing the situation they are mistaken.
Bulls get a grip.........Do you fools really think stock prices will always go up....if so then maybe you bought one of those loans also. :eek:
No sense even getting into sterilized or unsterilized intervention.....it is all in a GOOGLE search. Have a good weekend all ......lets make a ton of bacon next week and keep up the volatility. but indeed we can do without the fed screwing up things.