Another thing to worry about is that in the last 2 days many are anticipating a rate cut Monday or Tuesday, if nothing happens the market is going to fall even further, this time breaking 13,000 and most likely head for 12,600. However a surprise rate cut which is the only thing bulls have going for them could send the market up 3% for the week.
rate cut wont heal subprime or alt-a troubles...... it would only drag out the inevitable ...... and tank the dollar....
WTF calls for rate cuts are just RIDICULOUS. First off rates should be higher, the problem is with housing if FF rate was higher, housing would even be more of a problem. Inflation is alive and well , look at commodities, look at crude. I am saying the Fed should target asset inflation as well as wage inflation . The Fed system is insane and people calling for a lower FF rate are clowns. If someone has to be bailed out it's th people whohave been misled by mortgage lenders. But not before some folks go to jail. And the record is set straight on "Maestro" Greenie and its Fed. Secondly everybody is panicking about the Dow drop, when the market rallies see how everybody talks about subprime not being so much of a problem anymore. Really the market is insane and America is insane. That said I am long since Wed lows and feeling the pain like everyone but a rate cut , no way !
no it wont heal the subprime. that's just getting started. rate cut? do you think the economy is that bad to call for a rate cut?
Nah, there won't be a rate cut and the market will be satisfied with a change in the Fed statement from being predominantly concerned with inflation (in the June statement: http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070628/) to a balanced concern between inflation and economic growth. The change in the statement will show that Bernanke has an eye on the market and will cut if it later becomes necessary. The market will be comforted and, barring further subprime slime, will have an up week. Aaron Schindler Schindler Trading P.S. My predictions are almost always right about 50% of the time.
Bernanke doesn't give a rat's ass about subprime........... He's too busy trying to calculate how a 10% rise in ketchup prices will affect the international flow of funds and the derivative effects on 2015 GDP in nominal terms.....
Your logic is so unbelievably twisted that I don't know where to begin. If the market was in fact ANTICIPATING a rate-cut over the last 2 trading sessions, don't you think that it would have rallied instead of gone into the crapper? Then you go on to call a potential rate-cut a "surprise" . . . even though "many" (your words) are anticipating a rate-cut Monday or Tuesday. What is it that you REALLY do for a living? I hope it has nothing to do with managing money.
While I don't expect a cut I'll be positioned in anticipation of an ease. The statement will be the most dovish we've seen since Bernanke became Chairman. Why? With the Long Bond at 4.86 it's comical for the Fed to rail over inflation. Needless to say the Fed will say nothing that'll be interpreted by the market as unresponsive or insensitive to the recent credit crisis. At this juncture given the choice, the Fed would rather derail a pumped Treasury market than a jittery equity trade.