I woke up this morning and saw these 3 pieces of economic news and thought to myself is there really any need for a rate cut today at 2:15pm. The dollar is at all time lows and oil at all time highs. So what do you think bernanke will do, surprise the market without a rate cut, haha, are you kidding. All day long I have been hearing on cnbc that .25 is already priced into the market and that if they don't cut, well say hello to a nasty triple digit loss by the 4pm closing. But we all know bernanke isnt going to do that, he isnt going to rattle the markets without a rate cut...... He is going to give what wallstreet wants and thats a .25 basis point cut which should easily rally the markets between 1-2%. The dollar should fall further on this rate cut while oil could have the chance of running to 95+ Nothing like a risk free market...
I was thinking the same thing. Hey, they economy is doing fantastic -- no more need for rate cut. But, although it's already baked in. I am getting some feelings of suspicion... Market is soaring in the am on great economic news. Indices are near all time highs. Could it be possible, even conceivable that we get a flat rate and market tanks to fade the masses? Nah, can't happen, I said. Can it?:eek:
GDP report is total BS. Look at it yourself: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm (scroll to Table 4) Inflation dropped from 2.6% in Q2 to 0.8% (yes below 1% y/y) in Q3! If you use Q2 inflation GDP is 2.1% and if you use Q1 inflation 4.2% GDP is 0.5%.
What I find even more amusing is when the talking heads say the economy is doing fine, consumer spending is great, inflation is in check and gdp growth is doing wonderful, the ones saying that are the ones who want the 50 basis point cut.... I think they want to add more liquidity into the system just to create bigger bubbles in other asset classes, thats what is happening right now yet no one wants to admit.... This credit bubble can only go on for so long...
the dollar is collapsing.... i wouldnt be surprised to see bernacke do nothing (hold rates) to try to shore up some support for the $$ and shake out a few of the many people playing pile on on the dollar... give commodities a good whack too and bernackes line would be"no problems here..." . also be a temporary recognition to other countries that the u.s i.s trying to support its own currency which is fucking up a lot of countries(which would only be a token gesture regardless but at least its something) we will see...
I was really surprised to see .50 cut on September 18th so anything is possible today. Market is expecting a .25, maybe thats why the dollar is falling, if there is not cut the dollar should rally pretty hard.
but the fed WILL cut and the market will surge even more and shorts will fry gold and oil will spike higher, puts converge to zero and I make lots of money