Fed cut Monday or Tuesday

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 the real world.
 
If the Fed does nothing and does not make a meaningful change in language indicating it is closely monitoring the situation and standing ready to act, we could easily see the stock index futures go limit down. If they don't cut now, things will continue to deteriorate in the credit markets and they will be forced to act by September or October. Maintaining an inverted yield curve when the financial sector is close to blowing up is madness.

Greenspan faced a similar challenge in 1990-91 and held rates too high for too long, wrecking the economy and Bush 41's chances at reelection. Thereafter, Greenspan was quick on the trigger to inject liquidity when crises broke out, maybe too quick. The media's favorite Treasury Secretary, Bob Rubin, seemed to have the ability to keep Greenspan in line. We'll see if another investment banker at Treasury, Hank Paulson, can do the same with the green Mr. Bernanke.
 
FWIW:

Ludwig von Mises summed it up like this:

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

“As a recent issue of Grant’s explains, global commercial banks are only required to set aside 56 cents ($0.56) for every $100 worth of triple-A rated securities they hold. That’s roughly 178 to 1 ratio. Drop that down to double-B minus, and the requirement skyrockets to $52 per $100 worth of securities held---a margin increase of more than 9,000%”.

“56 cents ($0.56) for every $100 worth of triple-A rated securities”

The notional value of derivative instruments (swaptions) instruments has risen to $286 trillion in 2006---up from a meager $63 trillion in 2000.
 
JES WAYNE a LITTLE 7% fall in stocks and you need the FED to save you.

Give me a break, where is the crisis !!!

Sounds to me like you and Cramer are suffering a drawdown and you need help.

Any market correction between 5% and 32% is normal business operations. STOCKS DO NOT GO UP EVERY MONTH or YEAR sometimes they have years being flat to down.

Inflation is likely to rise, so rates may be presured upwards....this may or may not happen.
 
Todays move seems like the want a Rate Cut. However, slight chance it will happen.

Last surprise rate hike, the financial moved just like they did today, I know, I was caught short at 11:30am when the surprise came.

I had to reverse, pay up and get as long as I good the banks, brokers.

Todays moves in the financials reminded me of such, but there was no rate cut.

The Odds are the fed will hold with a speach about the credit markets. I feel the fed will allow the weak banks/lenders to go under, as any healthy market will. The fed will not try and save the "Stock Market".

IMHO we have started the second quarter of a Consumer Lead Recession. Consumer spending has halted. This will have ripple effects across the country sending us into a deep recession. The feds will save their "Bullets" for such a signal.

A surprise cut may come, but not tomorrow.

E
 
1) There are clear signs of inflation coming off. QM was down 5% yesterday. Look at the commodity stocks. Look at the world markets, particularly the big consumers of raw materials, e.g. China. Look at the dollar stabilizing at a low.

2) On the other hand, the labor market is still tight. We got one number that showed the labor market was weakening, nowhere near enough to extrapolate from. Still, it is the most recent number.

3) Bond yields are beginning to compete with equities, adjusted after inflation. If that is not a temporary stance, I doubt the FED contributes to making bonds equally attractive as equities for long periods of time, unless inflation is runaway rampant like it was in the early 80s. This adds to the argument of easing in the future.

People are expecting a cut are wishful thinking. A new FED acts cautiously and goes through full neutral before taking any other action. If the FED comes out and says, we are worried about [global] inflation, but seems to be contained. We are on alert to a further deterioration of the credit markets, and we are now in a fully neutral stance and will act at any time to infuse liquidity into the market as needed.

A large number of traders will dislike that and sell and the initial reaction may be down, perhaps even down hard. How the overall markets react to that remains to be seen over the course of the week though, and it may even reverse hard into the close from an initial selloff.

The FED has already said it is fully neutral. It will make it official today. To me, that is very bullish over the long term. Markets are fixated on the very short term. For crying out loud, from an economic standpoint, the cuts aren't felt for 12 months anyway. So the cut would be to help out the credit markets, which may not be it's job unless it reaches a critical condition.

Reality bites.

nitro
 
I think they will give a statement that can be interpretted either way...toward a tightening or loosening bias. They will intentionally confuse the markets to create a little paralysis to calm things down.
 
Quote from AAAintheBeltway:

If the Fed does nothing and does not make a meaningful change in language indicating it is closely monitoring the situation and standing ready to act, we could easily see the stock index futures go limit down. If they don't cut now, things will continue to deteriorate in the credit markets and they will be forced to act by September or October. Maintaining an inverted yield curve when the financial sector is close to blowing up is madness.

Greenspan faced a similar challenge in 1990-91 and held rates too high for too long, wrecking the economy and Bush 41's chances at reelection. Thereafter, Greenspan was quick on the trigger to inject liquidity when crises broke out, maybe too quick. The media's favorite Treasury Secretary, Bob Rubin, seemed to have the ability to keep Greenspan in line. We'll see if another investment banker at Treasury, Hank Paulson, can do the same with the green Mr. Bernanke.
More...

Everything you say is true, but you leave out that the adjustment that is occuring in the credit markets has to happen. Risk has to be re-evaluated and re-priced. Whether it happens now, or in 6-12 months, or whenever, it's incorrectly priced and it needs to go through an ajustment. The medicine has to be taken, there's no way out of it.

We have to reap what we sow in order for healthy markets to resurface and the march forward to continue. The rot has to be exposed, removed and replaced with a firm foundation. Take your pick on analogies. There are hundreds of them.
 
BTW, if you ask me as a person whether it should cut or not, of course it should cut and ease suffering from people ill equipped to handle it.

These people don't think that way.

nitro
 
Quote from nitro:

BTW, if you ask me as a person whether it should cut or not, of course it should cut and ease suffering from people ill equipped to handle it.

These people don't think that way.

nitro
More...

And they shouldn't think that way.
 
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