Now why is the fed cutting rates?????

myminitrading · Oct 31, 2007

Quote from IluvVol:

I beg to differ. Inflation will run higher no question. Everyone knows that, the Fed, too. But thats not to worry. We can live with elevated inflation, look at inflation historically and thats exactly what the Fed does. It balances pros and cons. Do we want to slide into a global recession but can be proud we watched inflation or do we cut rates now and lower the risk of a huge slight somewhat. Thats the question.

By the way, tight credit is not something I pulled out of my arse. I work as bank trader and believe me tight credit is a serious problem to the economy. Companies finance themselves short term with commercial paper and other short term securities in the rates market, nowhere else. Without this source companies are dead. There was a huge fund SIV fund set up for this very purpose. So, I suggest we put the rethoric aside and look at the facts.

Companies should not finance themselves with short term paper, they should finance themselves with profits, are go out of business.

But then we would not need the fed right.

S2007S · Oct 31, 2007

Quote from stock_trad3r:

because the financals are still weak the the housing market

this fed is savvy and will cut rates

he will cut them as low as 3 if he has to and the dow will crosss 18,000 in the process

so much $$ to be made

so easy

3%, ha. Yea lets see what happens then to this economy....

S2007S · Oct 31, 2007

By the way did anyone see that the BOJ last night kept rates unchanged at 0.5%.

hmmmmmmm

IluvVol · Oct 31, 2007

Quote from myminitrading:

Companies should not finance themselves with short term paper, they should finance themselves with profits, are go out of business.

But then we would not need the fed right.

And how do the companies pay dividends, bonuses, one-time extraordinary payments, settlements? Gee, I really love your ignorance. But you surely sound like the market guru par excellence.

For your info, the short-term fixed income markets are designed for companies to assure short-term liquidity. This is absolutely vital to their health (I am not talking about start-ups here, because tapping this market would be too expensive for them relative to other means of financing, its a rating issue). The market for those short-term securities is greatly damaged and confidence has to be restored thats why the Fed is cutting. There is NO OTHER REASON. But please believe what your TV idols are telling you on CNBC or elsewhere.

IluvVol · Oct 31, 2007

Quote from S2007S:

By the way did anyone see that the BOJ last night kept rates unchanged at 0.5%.

hmmmmmmm

I am trader her in Japan. What else could BOJ do? They dont do a thing on their own. So why would they raise rates now against the Fed? That was a total clear case. I bet no more hikes this year for BOJ.

stock_trad3r · Oct 31, 2007

Dont fight the fed. Those who do lose lots of money.

makloda · Oct 31, 2007

Quote from IluvVol:
And how do the companies pay dividends, bonuses, one-time extraordinary payments, settlements? Gee, I really love your ignorance. But you surely sound like the market guru par excellence.

Now watch what happens: he won't answer anymore after being exposed and simply starts a new thread.

myminitrading · Oct 31, 2007

Quote from IluvVol:

And how do the companies pay dividends, bonuses, one-time extraordinary payments, settlements? Gee, I really love your ignorance. But you surely sound like the market guru par excellence.

For your info, the short-term fixed income markets are designed for companies to assure short-term liquidity. This is absolutely vital to their health (I am not talking about start-ups here, because tapping this market would be too expensive for them relative to other means of financing, its a rating issue). The market for those short-term securities is greatly damaged and confidence has to be restored thats why the Fed is cutting. There is NO OTHER REASON. But please believe what your TV idols are telling you on CNBC or elsewhere.

Well back before all these synthetic mumbo jumbo can't figure out the prices crap. they paid out dividends with profits you dim wit.

IluvVol · Oct 31, 2007

Quote from myminitrading:

Well back before all these synthetic mumbo jumbo can't figure out the prices crap. they paid out dividends with profits you dim wit.

Are you really that stupid? Can you at least read otherwise its a huge waste of time to explain to you. Again: Companies have financed their short-term liquidity needs with commercial paper for decades. Investors do not buy commercial paper piece by piece they buy them packaged as securitized securities. Or do you want as investor to have to check the ratings, pricing sources and all this for each and every commercial paper? (There is lots of other reasons why this would be unfeasable but it would divert from the point). Now, those commerical papers are securitized but the problem right now is that there is no demand for those because of the most recent debacles in the credit markets and the lost faith in rating agencies. DOES THIS MAKE ANY SENSE AT ALL? I mean, if you dont know anything about this then why dont you simply admit but you come along and open your big wide mouth as if you are the top trader of a prop desk.

number22 · Oct 31, 2007

Quote from IluvVol:
By the way, tight credit is not something I pulled out of my arse. I work as bank trader and believe me tight credit is a serious problem to the economy. Companies finance themselves short term with commercial paper and other short term securities in the rates market, nowhere else.

That was the problem; banks didn't want to go under with their stupidities on lending; so they uses this excuse to drag any good business with them in the name of protecting the economy.

Today's banking system is pure monopoly; no wondering they hates the ideas about WalMart to operate its own banking.

Liquidities are tight; because no-one wants bank's worthless commercial paper; Banks lie about these paper.