Yeah, just keep borrowing money and go deeper into debt. Yes, thats the answer to a credit bubble. Start the printing machine!
Bernanke has NOT been lowering rates. He has been TARGETING the banking system to provide more liquidity via "auctions" at the discount rate window to specific commercial institutions. These are essentially 30-day REPOS to help out the banking system. Period. Again, the FED is NOT conducting any open market operations that is PERMANENTLY injecting money into the system via the dealer community. Many of you need to go back and take a class in "Money & Capital Markets".
Not gonna rally much from these levels, the Fed rate cut rally occured yesterday in the final hour of trading. Today's rally is for suckers late to the party. We are going down from here.
For those who haven't seen one of the best Youtube's ever. Paul Hubbard, Dean of Columbia Business School, and member of the FED...who was passed over for Bernanke's spot, LOL. <object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/3u2qRXb4xCU&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/3u2qRXb4xCU&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object> Great song too, LOL Don
Huh? The Fed funds rate in September was at 5.25%. Now its at 4.25%. What part of lowering rates do you not understand?
You obviously lack a basic understanding of the difference between REPOS and that of open market operations that permanently inject money into the system ( ie. coupon-pass ). Example, back in August: "On Friday, the Fed added a hefty $38 billion of liquidity -- the biggest temporary addition to the banking system the U.S. central bank had made in a single day since September 19, 2001, in the aftermath of the September 11 attacks."
No chance in hell I buy into this spike. If the DOW is pumped over 100 during the speech, I will fade the shit out of it. I don't think anyone is taking this hook, line and sinker.
The fixed-income market LEAD the Fed to lowering the Fed Funds; not the other way around. There's a big difference.