The way I see how bad a shape the global market is today. It leaves us two possibilities: 1.There will be an emergency aggressive rate cut, before or during Tuesday's trading. 2.No emergency rate cut and we see a total devastatic BLACK TUESDAY. I do not see a third possibility, any one see a third possibility? I don't think so. So it should be clear to Ben Bernanke that he can choose to have an emergence rate cut, and he can sit and see a BLACK TUESDAY and let US economy slip into a deep recession or outright great depression. What do you think he will do? Sit without action or do an emergency rate cut. If there is a PPT it's time for them to act now in full force. Bet on that. Bet that an emergency rate cut will come. It's only one week earlier than regular Fed Meeting, but the psychological effect is significant. Why do you think the US dollar rallied today. Is this a good time for US dollar rally and for precious metals to plummet? It's an act by TPTB to jack up US dollar in preparation for the inevitable fall when they cut the rate in emergency!
Congrats JJ, finally a post of yours not involving PAL or Palladium. I told you those shrink sessions would help you out
Coaches and managers call team meetings when things are going bad, the smartest coaches and managers call them when the schedule is in their favor and gives appearance that it was the team meeting that turned the team around. The best time for an emergency cut is before the market opens and when you catch the shorts off guard and you get a lot of short covering to get a positive effect. The problem here is that foreign markets are baking in a lot of downside to the market which gives shorts a cushion. The danger of a rate cut is that it might reverse some steam away from the overseas sell off, but it would probably not fuel much of a short covering rally. That is the risk for Bernanke, firing his last bullet and getting very little to show for it. I think Bernanke has to wait to let the market do what its going to do on Tuesday. If Tuesday has a sell off of only 200 Dow points, then you might fire your bullet. I think the chances of the market finding a bottom without the Fed is equal to it finding a bottom with an emergency cut. The facts are, it is truly a global market and Bernanke is little man holding a position which is diminishing as the time goes by.
Cut is a bandaid for a bullet wound. It's not public, but ATT will be cutting head count by 10%. (sic) earnings are strong but built on mud. Why is it every egghead's assumption that growth tracks inversely-proportional to rates? Throwing money at the problem with do nothing.
TicketWatcher: Ben will probably sit and wait to see what the market will do if he perceives that the market may stabolize a bit after a moderate 200 point drop on tuesday. But the perception is that the market will not just fall moderately, but will probably see an uncontrolable fall which causes chain reaction of a lot of things. They could totally lose control and a cut will no longer do any good. So even if this is the last bullet he has, he will have to use it now to make it meaningful.
100% correct, it has gone way beyong that point. It is now an issue of the faith in the viability of the credit market.
<i>"Throwing money at the problem with do nothing."</i> That's an absolute fact, but it sure won't stop the Fed from plying their failed approach. Don't be surprised if they cut 50-basis before 2pm est on Tuesday... could be anytime past the opening bell during cash session as they did in Jan 2001 and Apr 2001. That could still leave another cut of 25-basis (or more) at the next meeting. When our Federal govt is proposing to mail out $150 billion in checks (???) to spur consumer spending, can we expect rational actions from that group during highly emotional times in an election year?