There will be no Fed rate cut

[Dr.Greenback]

Quote from dhpar:

is that true? Somehow I do not believe that.

Ok fine, there are 21 primary dealers in that market; all banks.

Listen, It's one thing to gamble on a short position in treasuries because you have a "hunch" they won't cut. But, really, this is not the kind of market filled with online daytraders from home.

This stuff really does matter. It's primarily a hedgers market for banking institutions. But, it affects other rates and lending because their the ones trading and issuing the debt while transferring their cost and risk to other investors in the "Secondary Market". Then ultimately to the consumer.

 

[dhpar]

ok but for a clear record let's emphasize that it is NOT Fed who is the biggest player in fed fund futures market.
it is actually an extremely important distinction - especially if you are a trader. cheers

 

[MrKennedy]

The fed will cut despite the weakness of the dollar and here is the reason. In the last two years several senators and economic policy officials have stated that their intent is to move th US to an export economy. In order to do this you have to have a weak currency to the point where it is beneficial for foreign countries to setup their manufacturing bases in your country. Additionally, legislation was passed which provided the export-import bank the ability to make exports easier for major corporations and small business, via government grants and other funds.

So while the fed cutting will weaken the dollar, it will also stabilize the market, and go inline with the overall plan to move to an export economy.

On a side note, about a year ago the holdings of Vice President Chaney came to light. The story showed that Chaney had 10-25Million dollars invested in funds that were pegged to interest rates going up and had 25 Million invested in an international bond that was hedged AGAINST increases in the dollar. The title of the article was "betting on bad news" (http://articles.moneycentral.msn.com/Investing/Extra/CheneysBettingonBadNews.aspx)

So this is my fact based opinion, and I always keep in mind not only the short term fed decisions, but the short term decision in light of the long term objective of the people who determine the economic policy of the country.

 

[Ivanovich]

Quote from MrKennedy:

The fed will cut despite the weakness of the dollar and here is the reason. In the last two years several senators and economic policy officials have stated that their intent is to move th US to an export economy. In order to do this you have to have a weak currency to the point where it is beneficial for foreign countries to setup their manufacturing bases in your country. Additionally, legislation was passed which provided the export-import bank the ability to make exports easier for major corporations and small business, via government grants and other funds.

So while the fed cutting will weaken the dollar, it will also stabilize the market, and go inline with the overall plan to move to an export economy.

On a side note, about a year ago the holdings of Vice President Chaney came to light. The story showed that Chaney had 10-25Million dollars invested in funds that were pegged to interest rates going up and had 25 Million invested in an international bond that was hedged AGAINST increases in the dollar. The title of the article was "betting on bad news" (http://articles.moneycentral.msn.com/Investing/Extra/CheneysBettingonBadNews.aspx)

So this is my fact based opinion, and I always keep in mind not only the short term fed decisions, but the short term decision in light of the long term objective of the people who determine the economic policy of the country.

Sorry, but I must respectfully disagree. As usual, senators know very little about economics. To devalue the dollar to the point where the US could become and export economy, inflation would be far, far beyond the tolerance level of the local populace - much less the Fed.

 

[El OchoCinco]

Quote from MrKennedy:

In order to do this you have to have a weak currency to the point where it is beneficial for foreign countries to setup their manufacturing bases in your country. Additionally, legislation was passed which provided the export-import bank the ability to make exports easier for major corporations and small business, via government grants and other funds.

First, the dollar will NEVER be weak enough for foreigners to move manufactering here versus overseas. I doubt a strong dollar is the reason manufacterers are in China, Vietnam, Pakistan, Mexico, etc... It is way cheaper in terms of labor and other costs and shipping good from so called 3rd world countries to here is still cheaper than making those products in the US.

Here is one interesting fact, for a long time who is the U.S.'s largest trading partner who imports the most to the U.S.?

You might be surprised to know it is Canada because most of the US auto manufacterers build the cars there and bring them back in to the U.S. (The trade gap with China, the second-largest U.S. trading partner after Canada, increased 13 percent to $23.8 billion in July, second only to the record $24.4 billion reached in October 2006.)

Also the ex-im bank supports financing of exports to make it easier for overseas entities to buy U.S. goods. Ex-im bank only serves those who cannot get standard private financing so it is not a means to weaken the dollar but simply provide financing.

This country is a consumer lead economy and if you weaken the dollar and drive import prices up the Fed will have to raise rates to fight inflation and the dollar will strengthen and this will go on back and forth.

 

[Ivanovich]

Quote from optioncoach:

First, the dollar will NEVER be weak enough for foreigners to move manufactering here versus overseas. I doubt a strong dollar is the reason manufacterers are in China, Vietnam, Pakistan, Mexico, etc... It is way cheaper in terms of labor and other costs and shipping good from so called 3rd world countries to here is still cheaper than making those products in the US.

Here is one interesting fact, for a long time who is the U.S.'s largest trading partner who imports the most to the U.S.?

You might be surprised to know it is Canada because most of the US auto manufacterers build the cars there and bring them back in to the U.S. (The trade gap with China, the second-largest U.S. trading partner after Canada, increased 13 percent to $23.8 billion in July, second only to the record $24.4 billion reached in October 2006.)

Also the ex-im bank supports financing of exports to make it easier for overseas entities to buy U.S. goods. Ex-im bank only serves those who cannot get standard private financing so it is not a means to weaken the dollar but simply provide financing.

This country is a consumer lead economy and if you weaken the dollar and drive import prices up the Fed will have to raise rates to fight inflation and the dollar will strengthen and this will go on back and forth.

Agree 100% with Option. Furthermore, let's just say that the strength of the Loonie is slaughtering those manufacturing jobs in Canada. Check the latest Trade surplus numbers from our northern neighbors.

 

[dhpar]

Quote from Ivanovich:

Agree 100% with Option. Furthermore, let's just say that the strength of the Loonie is slaughtering those manufacturing jobs in Canada. Check the latest Trade surplus numbers from our northern neighbors.

so what. they have so much natural resources that there is no reason for them to work. look at norway...

 

[Ivanovich]

Quote from dhpar:

so what. they have so much natural resources that there is no reason for them to work. look at norway...

I'll pass on your note to the Canadian Manufacturers Association and to Dodge. I'll let them know they shouldn't worry.

 

[number22]

Life is so much easier if your are consumer; not producers.

Wondering why illegal migrant come in this countries to do the worst job which local don't want to fill.

 

[dhpar]

Quote from Ivanovich:

I'll pass on your note to the Canadian Manufacturers Association and to Dodge. I'll let them know they shouldn't worry.

good one.

it is ok for them - everybody will get his own (tar) sand pit.