Fed cut Monday or Tuesday

Yield curve is inverted. Low maturity yld greater than longer maturity yld=> inversion. Economists typically use 3mo and 10yr treasury yields as standard differential for predicting recessions. It doesn't always work. Earlier this year, when differential was at min, the recession probability was between 45-50% according to this model.


<img src="http://elitetrader.com/vb/attachment.php?s=&postid=1560190" border="0" alt=""><br /></font></p></font></p></font></p>

Looks a lot like late 2000 characteristics (can play with stockcharts tool to see this) except that mean yield across maturities is lower now.


http://stockcharts.com/charts/YieldCurve.html
 

Attachments

What would happen now if Fed unexpectedly cut rates?

Fed does not become involved in markets in these situations other than to goose liquidity in reaction to systemic meltdown. So if it gets involved it basically is saying there's a problem here.

But wouldnt lowering interest rates just be delaying the inevitable? It would not help in eliminating toxic waste positions, just allow them to hold it longer.
 
Quote from dividend:

What would happen now if Fed unexpectedly cut rates?

Fed does not become involved in markets in these situations other than to goose liquidity in reaction to systemic meltdown. So if it gets involved it basically is saying there's a problem here.

But wouldnt lowering interest rates just be delaying the inevitable? It would not help in eliminating toxic waste positions, just allow them to hold it longer.
More...

Funny you say that. Ya'll know I'm a tireless real estate bull. Putting all that aside, I was talking to a mortgage broker friend of mine who feels all but certain that the Fed will have to step in and cut rates in an emergency move. He gave me a bunch of reasons why, like the latest round of poor earnings, the tepid inflationary numbers (after stripping out energy prices), and the subprime debacle. Think that could really happen???

SM
 
Quote from Smart Money:

Funny you say that. Ya'll know I'm a tireless real estate bull. Putting all that aside, I was talking to a mortgage broker friend of mine who feels all but certain that the Fed will have to step in and cut rates in an emergency move. He gave me a bunch of reasons why, like the latest round of poor earnings, the tepid inflationary numbers (after stripping out energy prices), and the subprime debacle. Think that could really happen???

SM
More...

except that earnings are actually pretty good, and the same goes with jobs.
 
Mortgage brokers don't know anything about the market...they're pure salesmen. I know a half dozen of them that were successful (making $500k+) 3 years ago and they are all on the ropes. One went so far as to say he was looking into become a floor trader!

LOL...

:D

Quote from Smart Money:

Funny you say that. Ya'll know I'm a tireless real estate bull. Putting all that aside, I was talking to a mortgage broker friend of mine who feels all but certain that the Fed will have to step in and cut rates in an emergency move. He gave me a bunch of reasons why, like the latest round of poor earnings, the tepid inflationary numbers (after stripping out energy prices), and the subprime debacle. Think that could really happen???

SM
More...
 
Quote from Enfinity:

Mortgage brokers don't know anything about the market...they're pure salesmen. I know a half dozen of them that were successful (making $500k+) 3 years ago and they are all on the ropes. One went so far as to say he was looking into become a floor trader!

LOL...

:D
More...

from one ailing profession to another.
 
Quote from dividend:

What would happen now if Fed unexpectedly cut rates?

Fed does not become involved in markets in these situations other than to goose liquidity in reaction to systemic meltdown. So if it gets involved it basically is saying there's a problem here.

But wouldnt lowering interest rates just be delaying the inevitable? It would not help in eliminating toxic waste positions, just allow them to hold it longer.
More...

with a US money market fund locking up today, it's looking grim

Bernanke liquefied the banks, he better quickly liquefy the consumer
 
Quote from sobemark:

when are people going to realize that the feds job is not to support the markets .

sorry ..there is no reason for the fed to drop rates ..none at all ... 100% they won't do it ..

--m
More...

Not to be an ass or anything, but who the hell knows what the Fed's job REALLY is, anyway? They are not a government run organization despite appearances. They create money where there is none then extract interest from every American. Scary folks those...

Best to stick with the charts and take a reasonable risk here or there and get out when it doesn't work. Rinse and Repeat till Rich. Those are my three R's...:D
 
Quote from daddyeaux:

with a US money market fund locking up today, it's looking grim

Bernanke liquefied the banks, he better quickly liquefy the consumer
More...

Would that be blend, or frappes?? Ah, shit, just hit frappes!
 
the Fed. is there to protect the banks not the depositors

I'll bet a t-bone steak that the President asks Citi, Goldman and Morgan if they like or dislike a Fed Chairman nominee before he is named.....
 
You must log in or register to reply here.
Back
Top