I think people are thinking we could get another 50 bp bopper from Bazooka Ben after the earnings bombshells that Citi and Merrill put out. It would not surprise, damn the torpedoes, and the dollar, we can't have those bankers losing money!
I think you have to look at Bazooka Ben's reputation here, he doesn't care if he's known as Helicopter Ben, he's still scared that there could be a Great Depression on his watch and he'll do anything to stop it, even if the USD goes to 1.5 against the Euro. The Japanese and Chinese are dumb enough to keep buying Treasuries, what incentive is there to keep the dollar strong with a massive debt?
Should be no cut in the funds rate and make the discount window par with the funds rate. Provide liquidity to the banks, don't flood the general markets. Of course that's not what's going to happen and of course everyone will perceive a cut as bullish. So bad economic data is bullish for stocks??????? I haven't seen as many consumer companies come in light or miss as there have been this past quarter in quite a while.
Although I agree there SHOULD be no cut, there will be. Unless someone here knows of a time when the Fed Funds Implied Futures showed 100% chance of a cut, and there was no cut.
When the dollar is tanking like it is against all major currencies, especially the euro, there should be a rate HIKE. But Wall Street wants some candy on Halloween, I think Bazooka Ben hands out a bunch of Bazooka Joes.
Funny that DICK cheney came out today saying, "US believes in a strong dollar". I will finish his sentence for him........ "but all of us here in the district of Columbia don't believe that for one moment"