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Real liquidity problem?
- Thread starter dividend
- Start date
I think the best way to answer that is research and what people that are in the midst of it are saying.
try these links..I found them enlightning
http://www.msnbc.msn.com/id/20405745
http://articles.moneycentral.msn.com/Investing/SuperModels/RateCutsWontCureAilingMarket.aspx
http://www.nytimes.com/2007/08/23/b...00&en=774a2a894ebf67e2&ei=5043&partner=EXCITE
Now I do have one question of my own. How does giving money to someone that couldn't properly risk manage it before make them capable of risk managing it this time?
The closest parallel that I can think of is like giving a drug addict cocaine...how does that help?
try these links..I found them enlightning
http://www.msnbc.msn.com/id/20405745
http://articles.moneycentral.msn.com/Investing/SuperModels/RateCutsWontCureAilingMarket.aspx
http://www.nytimes.com/2007/08/23/b...00&en=774a2a894ebf67e2&ei=5043&partner=EXCITE
Now I do have one question of my own. How does giving money to someone that couldn't properly risk manage it before make them capable of risk managing it this time?
The closest parallel that I can think of is like giving a drug addict cocaine...how does that help?
vectors101
Guest
50% of the market is on margin so any cut in interest rates is good for the market.
But you see Ben Bernanke has rules to follow like if the economy is low unemployment rate or inflation is high interes rates must be equal or more than inflation rate.
When interest rates were 1% money in bonds or fixed income funds were forced into hedge funds and stocks buying real estate etc. that yield 6% dividends....
when the money left fixed income investments it drove inflation up for real estate, stock market, and commodities..FED has no choice now but to increase rates..it's lesser of two evils..either you want high growth with high inflation low unemployment and high interest rates. OR low interes rates and high unemployment or recession
But you see Ben Bernanke has rules to follow like if the economy is low unemployment rate or inflation is high interes rates must be equal or more than inflation rate.
When interest rates were 1% money in bonds or fixed income funds were forced into hedge funds and stocks buying real estate etc. that yield 6% dividends....
when the money left fixed income investments it drove inflation up for real estate, stock market, and commodities..FED has no choice now but to increase rates..it's lesser of two evils..either you want high growth with high inflation low unemployment and high interest rates. OR low interes rates and high unemployment or recession
vectors101
Guest
FED can't control the markets nor should it.
Why should the FED care about market volatility...
the FED or SEC should be enforcing the rules that are in place not manipulating the markets to bail out reckless trading and lending...
if banks goes bankrupt it's their problem for making reckless lending and if markets crash it's because the price is too high and too much margin and borrowed money or speculation..so it's the market participants problem.
Why should the FED care about market volatility...
the FED or SEC should be enforcing the rules that are in place not manipulating the markets to bail out reckless trading and lending...
if banks goes bankrupt it's their problem for making reckless lending and if markets crash it's because the price is too high and too much margin and borrowed money or speculation..so it's the market participants problem.
Quote from daddyeaux:
not a stampede but the slope is increasing....Fed is dumping money into the system regardless