Tuesdays rate cut

Discussion in 'Wall St. News' started by bradstal, Mar 16, 2008.

  1. bradstal


    What are your thoughts on the market reaction if it is:

    .50 basis points

    .75 basis points

    1.00 basis points
  2. nitro


    .50 is 100%
    .75 is likely, say 80% chance.
    1.00, don't be surprised probably 65% chance.
    1.25 probably less than 50% chance.

    I think the FED should lower the Interest Rate to zero at this point. I am not joking. The only caveat is the language should say that 1.25% of that cut to zero will be taken back in a month.

  3. cutting to zero and then pumping it back up in a month would do nothing but make the fed look more idiotic than they currently do...
  4. Just cut it to zero. Like it's going to to a thing. Isn't the Japanese keep the rate low for the last 20 or 30 years, and their market still 40% off their all time high?

    Just like the market absorb the lost, and get it over with. Stop printing money, and stop destroying the dollar.
  5. nitro


    Perhaps. But I tend to disagree.

    The argument against is that cutting rates doesn't address the real issue at the heart of the current financial crisis. But it will definitely put a bottom on those financial stocks like C JPM AXP etc that are so critical to the stock market, even if we lose 1270 SPX support.

    IMO we are at a very important inflection point. If we lose 1270 SPX without aggressive FED action, my guess is we land somewhere in the 1175 to 1200 SPX area. Pick your poison.

  6. Perleeeze! The dollar is confetti money. Its just a measure of value but also it only has a relative value at any one time. You don't need to bow down in adoration of the fucking thing. A 10 to 1 revaluation of the currency is overdue. Any serious asset value these days or Fed budget figures and you have to start talking about trillions or zillions. What the fuck does that mean to most people? A fuckin' heap of indecypherably long numbers.:eek:
  7. nitro


    What is wrong borrowing with a strong currency and paying it back with confetti money?

    If you ask me, the real morons are the ones that took the bait for so long.

  8. Nice point. The great thing about US external debt is that it is in US dollars. If instead it had been denominated in Sterling, Yen or Euro then there would be something to really worry about.:cool:
  9. Good point. That's why the US has to print and print. They are so deep into debt without the ability to pay it back that devaluing the currency is the easiest way to pay back the debt, without formally defaulting.

    The Fed is doing this as we speak, thus the rally in commodities and euro and yen. The market speaks loudest and clearest about what's going on. The devaluation of the dollar is under way in earnest.

    What is surprising are foreigner's appetite for US government debt despite the obvious signs of a dollar devaluation, at this point, as contrarian as it sounds, buying up US real estate has more value than buying US Treasuries. At least real estate is a physical tangible asset that can't be printed to exhaustion, Treasuries can be printed at any time.
  10. Beware a low dollar will be highly inflationary.
    #10     Mar 16, 2008