350zCommtech's Account Talk

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bargain prices, even falling to the 20 dma would be healthier in scaring the herd, then its definite buy buy buy!!! :)
 
program buying will hopefully kick in if the s&p falls a few more clicks. GS, EV and other financials showing positive divergence. We need large volume/accumulation to act.
 
I get the feeling the Feds won't cut until the 18th. Moving to G fund. I see a slow grinding slide down. Bernanke will keep the same tone tomorrow.
 
Reactive1 said:
I agree you definately won't see a rate cut until the 18th and even that may come kicking and screaming.
Click to expand...

Yup, it's going to be a tough call on Friday or Monday. If they don't cut, the market will tank at least 5%. A .25% cut might be looked at as too little, causing a 2-3% sell-off.

I believe they are going to cut but I'm not sure if they'll do the .5% as expected by the markets. What's really bothering me is why are these Feds out talking like they are? Why not just shut up and let the market speculate? I find it hard to believe that the Feds are trying to tell us that they are not going to cut. The drop in bond yields and the negative jobs report, with huge revisions, gave them the credibility to cut. They can't be that dumb to stand by while the economy falls into a recession, or can they?
 
The problem is, and Bernake knows this,


1. A Fed rate cut will not solve the underlying problems in the financial markets that have the potential to actually effect the economy.

2. It's not the Feds job/function to save the "market."

I think that Bernake, as a pure academic, does not want to cut rates. He may allow himself to actually be influenced by the emotional want for a rate cut, in this case, but he knows it won't make any difference and in fact may artificially and dangerously mask a problem that the market really needs to weed out itself. The Fed sees a bigger picture, their primary goal is to stop INFLATION at all costs because they know that inflation is the one economic event that drives down the ENTIRETY of the national economy and is next to impossible to put back in the bottle once it is allowed out. A recession is better than high inflation because a recession has a recovery in the relative short term. Inflation does not. It's sort of like the mother who won't let her child have a cookie because she KNOWS it will ruin his appetite for dinner. What might be hard to do or seem hard-hearted is in fact the mature and wiser choice to make.
 
Reactive1 said:
The problem is, and Bernake knows this,


1. A Fed rate cut will not solve the underlying problems in the financial markets that have the potential to actually effect the economy.

2. It's not the Feds job/function to save the "market."

I think that Bernake, as a pure academic, does not want to cut rates. He may allow himself to actually be influenced by the emotional want for a rate cut, in this case, but he knows it won't make any difference and in fact may artificially and dangerously mask a problem that the market really needs to weed out itself. The Fed sees a bigger picture, their primary goal is to stop INFLATION at all costs because they know that inflation is the one economic event that drives down the ENTIRETY of the national economy and is next to impossible to put back in the bottle once it is allowed out. A recession is better than high inflation because a recession has a recovery in the relative short term. Inflation does not. It's sort of like the mother who won't let her child have a cookie because she KNOWS it will ruin his appetite for dinner. What might be hard to do or seem hard-hearted is in fact the mature and wiser choice to make.
Click to expand...

I agree. If I was the head of the FOMC, I would raise .25% on the 18th and happily watch the thieves on Wall Street go bankrupt. It's better to crash now than later. Home prises need to fall 35-50% so that people can actually afford them using a convention loan with 20% down.
 
At last I completely agree with you. This thing with mortages is a good thing, and in the end will benefit our country, about time!! For those caught in the trap, we're sorry. Oh 10% down!:D
 
Reactive:

What you say is true.

However, IMO that the stakes at hand are a potential global sell off that will be akin to a crash landing for global markets rather than smooth glide path..

Personally, I am upset that the Fed is all over the map with their public discussion on this issue..the marketplace and investors expect competent, decisive action...keep the dirty laundry out of public view...from my perspective, the Fed looks like a fractured bunch of academics who don't relate to the reality of our capital marketplace...Just My Opinion...

Isn't the primary purpose of our institutions' is to provide for the public good? The Fed has an arsenal of weapons to manage monetary policy. IMO, not taking assertive action (or a course of actions) designed to provide the greatest benefit to the overall economy could result in a significant global turmoil. I guess I see it like this, "If the Fed has a vaccinaton to lessen our flu virus, they need to use it".

FS
 
The FED is limited in their power. They only have so many tools to use in an economy like this. If they use them all they have no more weapons and are dead in the water. There can come a point where they can't help.:suspicious:
 
Another Fed speak:


Fed rate move a judgment call: Mishkin
By Rex Nutting, MarketWatch
Last Update: 9:02 PM ET Sep 10, 2007

Mishkin, in an evening speech, said that, as best the Fed can tell so far, the impact of the financial market turmoil and credit crunch will hit the housing sector the hardest.

"However, economic activity could be affected more severely in other sectors should heightened uncertainty lead to a broader pullback in housing and business spending," Mishkin said in a dinner speech to an economists group in the shadow of the New York Stock Exchange.

"That scenario cannot, in my view, be ruled out, and I believe it poses an important downside risk to economic activity," Mishkin said.......

"Given the financial turmoil that began last month, I am generally encouraged by what I have heard and seen so far: As yet, tighter credit conditions do not appear to have had a major impact on overall economic activity outside of real estate," Fisher said.

"Our economy appears to be weathering the storm thus far," Fisher said. "The future path of that storm and the appropriate policy course, however, are still to be determined."
http://www.marketwatch.com/news/sto...3B-2C34-4C79-B6AC-EDDDB79BF968}&dist=hplatest
Click to expand...
 
nnuut said:
The FED is limited in their power. They only have so many tools to use in an economy like this. If they use them all they have no more weapons and are dead in the water. There can come a point where they can't help.:suspicious:
Click to expand...

This is true. The Feds job is monetary policy. There is too high an expectation of the Fed with monetary policy, and not enough with the government with fiscal policy, to solve the short term issues.
 
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