If the Fed cuts by 50pt tomorrow....

Quote from kitty1996:

i don't think the fed can really do anything to save america at this point. everything they can do now is ...creating another dead cat bounce till the shoe drop one by one...till dow of 8000.

us market is finished. recession effect will become clear in 2009. the dow will not stop dropping til 8000.
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7000. Half of the high. That will be a correction.
 
the liquidity on the fed funds futures seem to have dried up. the spreads are so wide. does anyone know if this is normal on fed days
 
Quote from GermanTrader:

7000. Half of the high. That will be a correction.
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I see the bottom around 8000-8500, this is going to take years, I think we are going to have a down to sideways market for at least another 5-10 years. The next bull market is years away, alot further than what statistics will tell you.
 
liquidity on fed days may be lower especially on the longer end.
this time it is different though. it is the first meeting in years which is not predicted 100%. it could be 50/50 50bps cut or anything else - judging by fed members it looks like nothing, judging by market participants it could be 75bps. therefore nobody really wants to trade this digital stuff......
 
how crazy mkts is visible e.g. in sep ff future...

implied (assuming 2% effective ff rate for the next 2 weeks) is somewhere around 97.97. after today's announcement it trades around 98.06, i.e. 8-9bps of free money....! crazy :cool:
 
well, that's VERY likely...

also why then october contract does not trade at 98.50+? switch on the brain.

(maybe because they will hike in the middle of october - off the meeting? lol):p
 
i continue to be puzzled by that - can somebody explain? how comes that Sep and Oct FF futures trade almost at the same le vels? (98.06 vs 98.09)

if i calculate correctly this means that effective ff rate till the end of september should average around 1.82!!! how is that possible?
 
Quote from dhpar:

how crazy mkts is visible e.g. in sep ff future...

implied (assuming 2% effective ff rate for the next 2 weeks) is somewhere around 97.97. after today's announcement it trades around 98.06, i.e. 8-9bps of free money....! crazy :cool:
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I remember taking the same attitude last year (after March).... needless to say, there were emergency cuts post my evaluation.

If you think we won't hear a peep about more bankruptcies/etc in the next month, you are right. I doubt it... Those aren't such an easy 9bp.
 
this is like milking cow - free monies. again 98.03 vs 97.95 implied with one week to go...and more importantly this w/e in few hours. I expect below 2.00 rate on the previous friday.
 
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