Rate cuts with a rising equity market

Discussion in 'Economics' started by myminitrading, Oct 24, 2006.

  1. This is insane and I am sick of hearing this shit. Here we have US equity indexes breaking records everyday, and I keep hearing talk of rate cuts how frigging stupid is that, enough please.
  2. 4re


    It is the only way we can afford to take out a loan and buy some of this insanely high stock.
  3. You made one of the calls of the year in August, dow record hi,gas 06 lows. Vix basing below 11. I wont trade this until I start seeing the vix reverse to the upside (weekly or monthly). Until then, the market will keep crawling up... When the market is ready to turn the VIX will it give it away.
  4. Dude, you're right.

    But it doesn't matter since it's 100% up room to go buy buy buy and forget about the fundamentals - its different this time.

    The bond market is gyrating more stupidly than a drunk stripper, and people are just looking at the equity run up going hmmm.... maybe I should take some of that money I earmarked for housing and put it into the stock market? They will wait until 2007 to start pumping in $$ and then watch out.

    Fed can't raise rates - they raise rates and all the puppies who got long heavily recently (go read the bond thread in futures) will get burnt and short cover and you will see 30 year rates up by 5.5% in the blink of an eye. And the closer the LB gets to 6%, the better it looks as a long term investment, and the less reason you have to put money into overpriced equities. So you can drop rates to 1) save the housing market, 2) allow the equity market to run-up and inflate the currency and 3) devalue the USD on the FX stage (although it will probably strengthen the way things are going to hell in a handbasket these days).

    I don't get it either, but I'm long the dow. Nothing else to do here but shrug your shoulders and use a trailing stop.

    And don't worry until after christmas. After all, it is the holiday season approaching and noone wants a bunch of gloomy guses around, right?

  5. Point taken. I dont know about the fact that currency will strengthen becouse FED will lower rates, even if this is crazytimes in markets. But I do have one misconseption regarding this fact when oil again will rise which OFCOARSE is not going to be soon. My personal opinion sometimes in 2007, then inflation will go up and we go in a circle again. Unil ten BUY stocks and DOW, SP 500, NAS and anyting else do with eqities. Bull till then. :cool:
  6. S2007S


    This is my prediction

    0% chance of a cut

    75% chance of rates staying at 5.25%

    25% chance they raise rates .25 to 5.5%.

    I think if the federal reserve leaves rates unchanged, the markets will have another party tomorrow. It will probably be another up day even though we are overbought.
  7. Overbought, is putting it lightly. The longer it goes with out a correction the harder and faster the correction will be, its coming less than two weeks away.
  8. Not in this scenario. Any correction gets bought hard. Hell, I'll be one of the buyers.

    (but I do got those 9200 puts that I bought for like nothing just in case I really was right all along. I'll take my (alpha-1%) so I can sleep well at night, thanks)
  9. I feel so complacent equity indexes rising just as expected, but under the surface I see deflation fear, and a world starving for yields. Doesn’t matter equity indexes can rise much more as PE rates increases.
  10. S2007S


    agree...as for some saying they will buy the dips remember what happened last time people tried buying the dips....the market continued to drop.

    A dip to me isnt 11950 a dip for to go long is around 11600-11700
    #10     Oct 24, 2006