Black Monday? and will the Fed cut rate on Tuesday?

[ayla]

"..public has been completely hoodwinked..""

from:
http://www.billcara.com/archives/2007/08/caras_thursday_report_aug_9_20.html#more
(cut and paste here taken from the very end of the page)

....
" For the past week, equities around the world have rallied. Now there seems to be people trying to drive those prices south. I think these are the people on Wall Street who are trying to pressure the Fed into dropping rates so they can save their jobs, having previously promoted Liar Loans and now seeing that the owners of those syndicated loans are asking to see real valuations.

At the end of the day, Prof Bernanke had it right this week when he said the issue is a problem but its totality, compared to the overall US financial system, is not enough to concern him. What he is saying is that he doesn’t want the Fed to drop rates because inflation is still an issue. What Wall Street is doing today is what CNBC’s James Cramer was apparently doing last week, which, I am told, was having an emotional crisis. Is it a phony one? I doubt it. These people are legitimately concerned about their jobs and they are getting together to whip up the public’s emotions. Do I think that’s the right thing to do? No. I think the Fed should demand transparency, and cause the badly managed broker-dealers and funds to be exposed. The public needs the nonsense stopped.

What the public doesn’t need is what I just read on the CNBC screen, which is the alert that the Fed has just released $12 billion in funds to relieve the situation. The futures market has responded with a 100 pct anticipation of a Fed rate cut at the September meeting.

It appears that Wall Street has won the day. This is pathetic. However, if this were a free market (as we are told it is), gold would almost certainly start to lift after that news of Fed action.

There will be no end to the nonsense, it appears. Wall Street combined with Financial Entertainment TV is a powerful lobby. The public has been completely hoodwinked by what is going on today. "

 

[JTH]

"..public has been completely hoodwinked..""

from:
http://www.billcara.com/archives/2007/08/caras_thursday_report_aug_9_20.html#more
(cut and paste here taken from the very end of the page)

Great Post, and a very good perspective to read up on.

 

[350zCommTech]

Wow! I'm asking the same questions again for next week.:worried:

After the bell, there was news that regulators denied Fannie Mae's request to raise their limits. This is very, very bad news. The futures are down hard and the Yen had a big spike. Financials, HBs, Brokerage, and mortgage lenders, will get killed on Monday.

Will we have a black Monday and will the Fed come out with a surprise cut on Tuesday?

 

[Birchtree]

I'm looking for the opposite and equal action to the upside - will I finally get a +343 point Dow? The subprime portion of the total amount of loans that are out there is less than 1%. Keep'em out of the stock market as long as possible. I say let them stew in their 5,000 square feet abodes.

 

[350zCommTech]

Wow! I'm asking the same questions again for next week.:worried:

After the bell, there was news that regulators denied Fannie Mae's request to raise their limits. This is very, very bad news. The futures are down hard and the Yen had a big spike. Financials, HBs, Brokerage, and mortgage lenders, will get killed on Monday.

Will we have a black Monday and will the Fed come out with a surprise cut on Tuesday?

U.S. agency rejects Fannie Mae's request for larger loan portfolio

Last Update: 5:47 PM ET Aug 10, 2007

By Damian Paletta Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Office of Federal Housing Enterprise Oversight said late Friday it would not allow Fannie Mae to increase its portfolio beyond the $727 billion limit created in May 2006, despite arguments by the company and senior Democrats that a change would provide much-needed stability to the shaky mortgage market.
The agency's announcement comes after a tense week of public posturing in Washington. Several major mortgage companies have complained about difficulty selling loans to investors, and Fannie Mae said it could pump liquidity into this area.

http://www.marketwatch.com/news/story/us-agency-rejects-fannie-maes/story.aspx?guid=%7B4E09B47F%2DBE57%2D438D%2D8673%2D3EC59DAE0DF2%7D&dist=TQP_Mod_mktwN

While this is good for us hard working taxpayers, it is devastating news for the market. The thieves of Wall street are going to have eat their own garbage for now. No Fed injections or Fed rate cuts are going to make the MBS, CDO markets any better. Garbage will still be garbage.

If the Fed cuts, the market will surely rally but it will not last more than 1-2 days.

Anybody noticed I changed my avatar?

 

[fabijo]

Anybody noticed I changed my avatar?

I did! I did! I even was going to comment on it the other day, but was too fixated on watching every tick of the stock market!

 

[350zCommTech]

I did! I did! I even was going to comment on it the other day, but was too fixated on watching every tick of the stock market!

Good, it was meant to be a warning of things to come.:worried:

 

[lmorgan]

Doed anyone suspect that the Goverrnment raided the TSP to get their 138 BILLION dollars on friday. Do they actually have to tell anyone? Why did they raid the TSP the last time?

 

[nnuut]

Doed anyone suspect that the Goverrnment raided the TSP to get their 138 BILLION dollars on friday. Do they actually have to tell anyone? Why did they raid the TSP the last time?

That money was fresh out of the mint, new money, expect the value of the dollar to drop a little more!! Let's hear one for the "I" fund!!:toung:

 

[Rocky]

Bernanke told Congress on March 28 that subprime defaults were ``likely to be contained.'' On July 18, he told Congress that foreclosures are creating personal, economic and social distress for many homeowners problems that likely will get worse before they get better. Last week he said all the right things except the truth..The truth is that Americans are addicted to credit,. we are now in a situation which will take a year or two to unwind,.it will inevitably spread to a large number of banks.Over the next two years a very large number of mortgages will become variable rate loans.Quotes: from Bloomberg worldwide news below

``Our market is rapidly swinging from manic to depressive and back to manic in nanosecond moves with each headline acting as a trigger,'' said Frederic Dickson, who manages $17 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
Central Banks Add Cash to Avert Crisis of Confidence (Update9)
By Scott Lanman and Christian Vits
Aug. 10 (Bloomberg) -- Central banks in the U.S., Europe, Japan, Australia and Canada added about $136 billion to the banking system in an attempt to avert a crisis of confidence in global credit markets.
The Federal Reserve, in a second day of action in concert with the European Central Bank, provided $38 billion of reserves and pledged more ``as necessary,'' in a statement unprecedented since after the Sept. 11, 2001, attacks.
Money market rates rose worldwide the past two days on evidence the subprime crisis is spreading after global investors piled into U.S. securities backed by mortgages. By the end of the day, the central bank actions helped spark a turnaround in American stocks and drive the U.S. overnight bank lending rate below the Fed's target.
Europe's Response The European Central Bank loaned 61.05 billion euros ($83.6 billion) after injecting a record 94.8 billion euros of funds yesterday that had to be paid back today. Overnight euro rates again rose as high as 4.27 percent today, compared with the ECB's benchmark rate of 4 percent.
Spreading Crisis The credit-market turmoil worsened this week after European banks acknowledged their vulnerability to rising delinquencies on American subprime mortgages.
Japan Monitoring `The effect of U.S. subprime loans is spreading to financial markets around the world,'' said Hiroko Ota, Japan's minister in charge of economic and fiscal policy. ``We need to carefully monitor how this will affect the economy
Fannie Mae, Freddie Mac Regulator Rejects Cap Request (Update2) By James Tyson
Aug. 10 (Bloomberg) -- The regulator for Fannie Mae and Freddie Mac rejected requests by the government-chartered companies to allow them to buy more home loans and help ease a credit crunch that has frozen the U.S. mortgage market.

Aug. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke was wrong.
So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal.
The subprime mortgage industry's problems were contained, they all said. It turns out that the turmoil was contagious.
The $2 trillion market for mortgages not backed by government- sponsored agencies is at a standstill. That's just the beginning. Other types of mortgages are suffering. So are firms and banks that package the debt for investors. The ripples were felt in Europe and Asia, where central banks offered cash to banks amid a credit crunch. And some corporations, from countertop makers to railroads, are blaming the mortgage meltdown and housing slump for earnings that fell short of analysts' estimates.
====================================================================
Meanwhile President. Bush is getting regular updates on the markets at his family's vacation compound in Kennebunkport, Maine. At this point my level of confidence is such that I have decided to withdraw from the market. The void of leadership makes me feel like I'm freefalling into a black hole.The chances of a recession are about 50-50 or worse. Cowardly me, and don't think I like those odds.

 

[Birchtree]

You have to be darn careful of those dark holes - you never know who is already at the bottom. Just don't fall on me.