Rate Cut

Looks like Alan Greenspan is using his favorite Washington Post reporter John Berry, Berry says "rate cut looking like a sure thing".

However this reporter has been wrong many times in his forecasts of the what the FED will do. Many economists (morons) predict the Fed will lower rates .50 bpts. Do we really need another rate cut?

LEI was up 1.0% today, jobless claims came in better than expected, industrial production is doing much better, housing starts are booming, stock market acting very well. Looks like the economy is heading in the right direction! We don't need another rate cut.

The FED should save any additional rate cuts for unknown events that may happen down the road.
 
Quote from Point Man:

Why does Greenspan need to cut rates you may ask? The US economy appears to be showing signs of recovery. Wall Street has rallied smartly this year. Consumer confidence will surely return. Why, why, why? IT IS ALL ABOUT JOBS Did anyone look at Thursday's jobless claims? The data was underestimated again and the revision was worse. Jobless claims have consistently been above 400k for months on end. People are still losing their jobs at an alarming rate. When is the last time you have heard that Corporate America was actually HIRING? It was 1999. When Corporate America starts hiring again, is when confidence will return. Everything else is artificial.
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I don't think so. As the business cycle turns from down to up, stocks come back first, corp profits and GDP second, and jobs last.
(Ivy league grads STOP applying at Worldco after that..)
 
Pff it's like always deflate one region (nation) pick the money to invest in other regions at the expense of the first nation's people already in crisis because the profit are just kept private and doesn't have to return to the first country it can escape elsewhere or simply put in detaxed "fundations" for fiscal reasons or others. It was true for Gold during world war II also of the low rates of Japan where money was borrowed at low price and injected in high US interest rates (so the stock market's bubble since stock market follows bonds market for intermediate cycle). Now it's the turn of US to finance ... China : yes FED is sending money to invest in China haha (I bet in new Century they will favor China to replace US as superpower) ! You are naïve these guys don't care about nations they are internationalists that's why they financed nazism-communism because it correspond to that interest. Latest years occident were put in competition with asia products, in the future it will be competition with high qualified engineers with experiences which will cost 5 to 10 times less than an unqualified engineer in occidental world, especially in software engineering but it could extend to all sectors. As for the software engineering field I will add all the more so that the so called "free" software organisation is sponsored by IBM/SUN/ORACLE because they want to create deflation in the software sector so that hardware regained the supremacy they have lost. This is not imagination this is explicitly said by the CEO of Sun in a professional magazine towards 1997. He even said that he want erase all services in engineering including the big ones (he mentioned explicitly SEMA GROUP as an example and what example since they are the biggest one ! today they hide their intention behind attacking the monopole of Microsoft wheras they prepare a much worst monopole and the massive destruction of a source of employment) except those the hardware companies will need: he speak of transforming the sector like Telecom: as he puts it that is to say a monopole where all materials and services will be furnished by them.

If you want to understand finance take the point of view of the general not the soldiers...

Quote from Point Man:

Why does Greenspan need to cut rates you may ask? The US economy appears to be showing signs of recovery. Wall Street has rallied smartly this year. Consumer confidence will surely return. Why, why, why? IT IS ALL ABOUT JOBS Did anyone look at Thursday's jobless claims? The data was underestimated again and the revision was worse. Jobless claims have consistently been above 400k for months on end. People are still losing their jobs at an alarming rate. When is the last time you have heard that Corporate America was actually HIRING? It was 1999. When Corporate America starts hiring again, is when confidence will return. Everything else is artificial.

Throw the 2004 Presidential Election in the mix and what do you have? You have a President that is doing everything in his power to win a second term. Give me a break. Bush started a war. He won the war (that was a no-brainer), but is losing the battle. Weapons of mass destruction have not been found. Americans are still fighting and dying in Iraq. We have not found Hussein or his sons and Bin Laden is still on the lose, dialysis machine and all. If the election was today, the only thing Bush could beat is his dog.

To win re-election, Bush only has one bullet left in his smoking gun. He has to turn this economy around and he has to do it RIGHT NOW. Rates are going lower still. This securities markets rally is for real and it is far from over. By the spring of 2004, you will be refinancing AGAIN at 2%.
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forgive me for asking ... but

what yield truely reflects a 25 or 50 bp cut

in the long bond?

heck it traded 5 handles last week !
 
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