Tens of billion EUR worth of underlying stocks via CAC/DAX/ESTX50 futures. I've read figures that estimate the total volume 50-60 bln EUR.
That sounds about right, LOL. Hey, if the Dow is up 200 points on Monday they may hike a 1/4 on Tuesday.
Fed is not averse to an orderly market decline -- 2000-2002 comes to mind. So, I think they will cut at most .25. Some possibility of no cut. This will actually be good medicine for the market. The S&P at 750-950 is an excellent buy.
Yields for the B-rated slice, five risk levels below AAA, grew to 1,400 basis points, or 14 percentage points, above the Treasury bill, and averaged 901 basis points in the past year, Morgan Stanley said.
If Europe and Asia would have been down a total of 4-5% on Mon/Tue before US open they still could have done a surprise cut of maybe 50, but the extra oomph must have been caused by Soc Gen. And if the markets hadn't been down that much they could have waited until their scheduled announcement. So, I didn't mean that Soc Gen caused the whole thing but it became a catalyst that might have pushed both the timing forward and increased the size of the rate cut. The Fed could still very well have cut 75 next week if they hadn't done the emergency one. As it is now, their timing is slightly off - they have to offer something more - and they already know that the 75 they did was probably as much as they should have done at the scheduled meeting. Just my 2 cents of course. And yes, I know this might be what everyone says - but often the Fed can be quite predictable and "everyone" is right.
how much they cut will depend on the US and world equity markets. if the market is down big, expect a 50+ cut, otherwise it'll be 25. bernanke has demonstrated repeatedly that rate cuts are proportionate to recent stock market activity.
It is ridiculous that the Fed even looks at the stock market when deciding to cut or raise rates. The Fed is a joke. Rates need to be at least 400 bps higher in order to curb inflation. The Fed should be worried about inflation, not propping up a cry baby market.
sound advice. it looks like the fed policy is going to led to spiraling inflation and further currency devaluation, which will exacerbate the world imbalances and hamper economic growth ambitions in the coming years. say hello to the non-sense economy, the demise of the usd as a reference currency for central banks and prepare yourself for sky high prices across the board. see what ECB is doing at the same time, as an example of austerity and tenacity, something will have a major impact in the aftermath of the war for economic supremacy.
Can anybody tell me what they think treasuries are going to do next week? I think treasuries have fully priced in at least a 50 cut but I agree with the people that have said we are only going to get a 25 cut. If we only get 25 will treasuries fall or will it depend more on what the stock market is doing (in case people still want to put money in a safe haven for the time being). We have housing data out early in the week which can only be bullish for the market as it is already priced in that its going to be bad so any suprisingly good/not as bad number and we will get a pop. Yields on treasuries are the highest since around 2002-2003 period. I think equities get a pop next week and treasuries start to give back some gains. YT