Will the Fed pause on Tuesday?

Discussion in 'Economics' started by Rearden Metal, Aug 4, 2006.

What will the Fed announce on Tuesday?

Poll closed Aug 8, 2006.
  1. The Fed will finally pause- I'm sure of it!

    17 vote(s)
    8.9%
  2. I think the Fed will pause.

    50 vote(s)
    26.2%
  3. I think the Fed will hike rates another quarter point.

    67 vote(s)
    35.1%
  4. Quarter point rate hike coming on Tuesday- I'm sure of it!

    35 vote(s)
    18.3%
  5. I have no clue what will happen.

    22 vote(s)
    11.5%
  1. I appreciate the constructive criticism. It has forced me to take a harder look at my analysis and strategy and I'm now more confident than ever before.

    I still haven't heard any counter-arguments to the coming '06-'08 US recession and market slump.
     
    #51     Aug 6, 2006
  2. Sounds like a rational, well-conceived strategy to buy pure vega at the absolute peak [imminent fed decision]. Don't count on early retirement just yet.
     
    #52     Aug 6, 2006
  3. My call is pause and short fry.

    Take it up!

    :cool:
     
    #53     Aug 6, 2006
  4. nitro

    nitro

    Very tough to say. But I can tell you this, it is not 15 or 20% which is what the FFFs are saying. I estimate it at closer to 55%. If QM rallies Monday or Tuesday to high $70, it is easliy 50% ++. But to me it is not the next meeting that counts, but the combination of the rest of the year odds of a raise, which in my estimation is close to 100%.

    First time in a long time I am this divergent from FFFs. What I find even funnier is that the market considers it a victory to go higher on a clearly slowing economy. Either way, the short term thinking that dominates todays market even in the face of mounting evidence is going to create a real juicy short when it comes.

    My estimation of markets continues to be, kill shorts and then kill longs, in that order - whipsaw. Rinse wash and repeat. When it goes to kill longs then kill shorts, watch out. Friday was kill shorts, kill longs, then kill shorts again. A very rare day.

    nitro
     
    #54     Aug 6, 2006
  5. taodr

    taodr

    #55     Aug 6, 2006
  6. The fed needs to raise more rate to keep inflation low and make housing more affordable. The current high housing price combine with record energy cost, own a house become a distance future for most people. Unless you make 100k after tax, there is no way you can afford to buy a decent place and live comfortably.
     
    #56     Aug 6, 2006
  7. Each 1% rise in mortgage interest rates is equivalent to a 10% rise in housing prices when making monthly payments (30-year loan). If rates rise 2% and house prices drop 20%, the slight decline in monthly mortgages payments probably won't make housing more affordable.
     
    #57     Aug 6, 2006
  8. S2007S

    S2007S

    Tuesday afternoon will be extremely volatile. I think a 1/4 raise and no pause.

    No pause would probably erase most of gains we have had in the last 2 weeks. 11k easy on the dow again and nasdaq 2050.
    No pause and I would be thinking to short the housing sector stocks like KBH, JOE, BZH and TOL or the entire sector in one ETF XHB.

    Many are anticipating a pause on tuesday. A possible pause could cause a brief rally and then another selloff when everyone starts to understand that the economy is slowing.
     
    #59     Aug 6, 2006
  9. Bernanke's job will be done when home prices start to depreciate.
     
    #60     Aug 6, 2006