Discussion in 'Economics' started by Rearden Metal, Aug 4, 2006.
What are your expectations?
One and then hints of done..........(because they are not even sure what the heck to do...LOL!)
Yes one and a hint of a pause.
Monday: indside day.
Tuesday: rally to 1300.
Wednesday: reversal to downside and bull market is over.
yes another worthless prediction from me.
hell, if we are going to predict...ill jump on board.
2. the pause is already priced in
3. drop at announcement
4. I can breath again...i bought a few puts.
i think any rally at a pause is unsustainable...after all...it esentially means that the economy is slowing, which is NOT good news.
I'm making a cedar fence for my DW, and bought the material @ Lowes 10 weeks ago. I checked Lowes prices today. Cost of cedar dim. lumber is up in that period about 9% annualized.
I remember reading Jane Jacobs, many years ago. She had a one size fits all theory about inflation. Any government that embarks on an inflationary expansion (the U.S. in the late 1970's), will continue.
She is dead, but her ideas may be correct.
The Fed should raise rates 50 bps in an attempt to combat this out of control inflation!
haven't the last few tightening cycles ended w/ a 50bps hike?
raise a qt and usual cheap talk--we might be done but will still monitor data closely--.
Don't know what everyone here is smoking. The Fed is done for now.
Whether the Fed is right or not, I don't know. However, they feel that the inflationary uptick is transitory due to high energy prices (see leak to Grep Ip in today's WSJ). They also know (and this is really not disputable) that inflation is a lagging indicator. Inflation has been on an upward path well into the last few recessions and did not begin to tick down until we were into a recovery.
As far as coincident indicators - employment, manufacturing, retail sales, ... - all are slowing.
As far as leading indicators - money supply growth, housing, yield curve ... - all are seriously tanking.
To sum it up: lagging indicators pointing up, coincident and leading indicators pointing down. The Fed is done. You want to be long 2 years.
What do you mean by long two years? And the Fed may pause due to political and corporate pressure, but they will have to hike again b/c of inflation. Granted, inflation is a lagging indicator, but the Fed HAS to overshoot inflation b/c they simply can't afford to undershoot inflation. Undershooting inflation is inviting very very bad things for this country and the global economy (dollar crash, added geopolitical instability, hyperinflation, etc). Unfortunately, none of this matters. Whether they pause, hike, or even CUT, the US economy is headed for a recession. The Fed may have to hike to 6% by year end to control the CRAZY inflation the gov reports have concealed with their creative accounting and corrupt practices.
Sounds crazy? you haven't seen sht yet. All you traders need to wake up and smell the coffee and realize we are in the midst of the final throes of the market before it surrenders and TANKS.
long-dated out of the money puts are cheap for now... how many of you will be kicking yourselves when the sht hits the fan for reading this and disregarding it? mwuhahaha!
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