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Fed cut Monday or Tuesday
- Thread starter silk
- Start date
Don't some of you people even read the Fed statements? Turn off CNBC and do a bit of research. There is not a snowman's chance in hell that the fed will cut on Tuesday. Just read the last statement. To say they'll cut on Monday just shows such an amazing level of cluelessness that it's not even worth commenting.
The real issue is what the statement will say. The markets rallied when the fed indicated they might pause and rallied again when they dropped their tightening bias so if they give any clues they may cut then the market will rally again. If after that good news the market can't sustain a rally then it might be the 'buy the rumour, sell the news' story that causes an even bigger sell off.
The real issue is what the statement will say. The markets rallied when the fed indicated they might pause and rallied again when they dropped their tightening bias so if they give any clues they may cut then the market will rally again. If after that good news the market can't sustain a rally then it might be the 'buy the rumour, sell the news' story that causes an even bigger sell off.
Quote from notouch:
Don't some of you people even read the Fed statements? Turn off CNBC and do a bit of research. There is not a snowman's chance in hell that the fed will cut on Tuesday. Just read the last statement. To say they'll cut on Monday just shows such an amazing level of cluelessness that it's not even worth commenting.
The real issue is what the statement will say. The markets rallied when the fed indicated they might pause and rallied again when they dropped their tightening bias so if they give any clues they may cut then the market will rally again. If after that good news the market can't sustain a rally then it might be the 'buy the rumour, sell the news' story that causes an even bigger sell off.
Exactly, good post
Quote from notouch:
Don't some of you people even read the Fed statements? Turn off CNBC and do a bit of research. There is not a snowman's chance in hell that the fed will cut on Tuesday. Just read the last statement. To say they'll cut on Monday just shows such an amazing level of cluelessness that it's not even worth commenting.
The real issue is what the statement will say. The markets rallied when the fed indicated they might pause and rallied again when they dropped their tightening bias so if they give any clues they may cut then the market will rally again. If after that good news the market can't sustain a rally then it might be the 'buy the rumour, sell the news' story that causes an even bigger sell off.
It is the new "entitlement" generation. Brought up like spoiled brats by fathers like me, they are now trading and whine when they loose. Markets should only go up, right? Oh and young punk homebuyers getting in over their heads, now owe more than the home is worth. Lessons learned.
The American dream has to be earned.
At some point Berrnanke will be asked by Congress why he's so concerned with inflation while Treasury investors are not in the least bit spooked.
Two's are trading 75 basis points cheap to Funds. The Long Bond, Christ in 30years it'll be backed by 20trillion in debt and a dollar that'll buy a gumball and yet it's 40 basis points under the overnight rate.
I'm an inflation hawk and it appears Bernanke is not going to cave. Kudos. However the fact remains theres an extreme disconnect between policy and prices. IMO it's the market that's wrong. To wit: the break this past Spring. It'll happen again.
Something's got to give.
Two's are trading 75 basis points cheap to Funds. The Long Bond, Christ in 30years it'll be backed by 20trillion in debt and a dollar that'll buy a gumball and yet it's 40 basis points under the overnight rate.
I'm an inflation hawk and it appears Bernanke is not going to cave. Kudos. However the fact remains theres an extreme disconnect between policy and prices. IMO it's the market that's wrong. To wit: the break this past Spring. It'll happen again.
Something's got to give.
Quote from notouch:
Don't some of you people even read the Fed statements? Turn off CNBC and do a bit of research. There is not a snowman's chance in hell that the fed will cut on Tuesday. Just read the last statement. To say they'll cut on Monday just shows such an amazing level of cluelessness that it's not even worth commenting.
The real issue is what the statement will say. The markets rallied when the fed indicated they might pause and rallied again when they dropped their tightening bias so if they give any clues they may cut then the market will rally again. If after that good news the market can't sustain a rally then it might be the 'buy the rumour, sell the news' story that causes an even bigger sell off.
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
Agree, if anything they will raise (which they won't) to stave off inflation. Inflation is their primary concern.
Interesting viewpoints. This is Bernanke's first real test. Inflation is a long term problem. A seize up in the credit markets that makes it impossible for mortgage lenders to securitize their paper is an imminent threat. Mortgage rates are up in a soft housing market, even though the ten year yield has dropped sharply, suggesting that lenders are under pressure.
Bernanke has to weigh the potential for damage to his credibility as an inflation fighter against the potential for a full scale crisis along the lines of the 1990 S&L debacle which nearly put every money center bank out of business.
Personally, I tend to agree with the viewpoint that the Fed will adjust their language but not lower rates, but I have grave doubts that is the proper course for them.
Bernanke has to weigh the potential for damage to his credibility as an inflation fighter against the potential for a full scale crisis along the lines of the 1990 S&L debacle which nearly put every money center bank out of business.
Personally, I tend to agree with the viewpoint that the Fed will adjust their language but not lower rates, but I have grave doubts that is the proper course for them.
if bernake lowers rate....it will remind me of when Soros used the "body language" of the bank of england and "faded them" for his ultimate HUGE score
that will be the sign of utter debacle coming to the US mortgage market and truthfully that 1st bounce in mortgage names/ homebuilders/ money center banks ...will be SHORTED THE HELL OUT OF by wise expereiced traders with staying power
i dont think that .50 off the int rate will do anything for the waiter paying a $5000/ month note on a 1% teezer that came due
or the fake straw mortgage frauder who already has spent the 100k he made cheating the bank
and there is NO WAY to get it refinanced with another int only loan ..and good luck selling it for what he paid for it.....
OH...and if anyone didnt notice Wells Fargo basically said..we dont wanna do ANY MORE MORTAGES unless its free money by sayin we are only goin to take 30 yr fixed 8% mortages...in my mind...thats a sign right there.....this is only the beginning
they dont even want new business......how is that for confidence in the US consumer
if bernake cuts...market rips 300 points....then LAY IT OUT
earlier poster is correct...he needs to raise rates..curtail inflation...support the Dollar and let the economy "flush the excess" ..unfortunatly that is going to hurt some people that were too greedy and unwise to realize an apt that was 200k is now NOT Worth 600k with no money down , 1% int only with neg amortiziation....im sorry
...but better a short term pain than long term gain
we don't want to end up being Argentina in 2000 where the Peso was basically worthless...printing cash, low rates, and excess borrowing has put us below any IMF stantards for "developing" nations and if more countries who are pegged to the dollar...IE saudi arabia, UAE, Panama, China, etc decide they want to start paying for OIL in Euro's instead of Dollars cause their purchasing power is also suffering at the hands of the weak dollar...................... look out Below
Raise Rates....and contain ridiculous inflation costs (health care, energy, insurance, etc)
that will be the sign of utter debacle coming to the US mortgage market and truthfully that 1st bounce in mortgage names/ homebuilders/ money center banks ...will be SHORTED THE HELL OUT OF by wise expereiced traders with staying power
i dont think that .50 off the int rate will do anything for the waiter paying a $5000/ month note on a 1% teezer that came due
or the fake straw mortgage frauder who already has spent the 100k he made cheating the bank
and there is NO WAY to get it refinanced with another int only loan ..and good luck selling it for what he paid for it.....
OH...and if anyone didnt notice Wells Fargo basically said..we dont wanna do ANY MORE MORTAGES unless its free money by sayin we are only goin to take 30 yr fixed 8% mortages...in my mind...thats a sign right there.....this is only the beginning
they dont even want new business......how is that for confidence in the US consumer
if bernake cuts...market rips 300 points....then LAY IT OUT
earlier poster is correct...he needs to raise rates..curtail inflation...support the Dollar and let the economy "flush the excess" ..unfortunatly that is going to hurt some people that were too greedy and unwise to realize an apt that was 200k is now NOT Worth 600k with no money down , 1% int only with neg amortiziation....im sorry
...but better a short term pain than long term gain
we don't want to end up being Argentina in 2000 where the Peso was basically worthless...printing cash, low rates, and excess borrowing has put us below any IMF stantards for "developing" nations and if more countries who are pegged to the dollar...IE saudi arabia, UAE, Panama, China, etc decide they want to start paying for OIL in Euro's instead of Dollars cause their purchasing power is also suffering at the hands of the weak dollar...................... look out Below
Raise Rates....and contain ridiculous inflation costs (health care, energy, insurance, etc)