Here's an idea

[chezhoy]

Anytime that Bernanke is scheduled to speak, move your money to the F (maybe the G) fund...seems when he talks the market drops like crazy. The man is hurting the market bad.

I was listening to Mad Money on CNBC on XM...Cramer and Donald Trump were talking about Bernanke...good stuff. Trump said about having Bernanke drop it 1 pt instead of 1/2...I like that idea!

 

[nnuut]

Looks like the bond market may have closed at 13:00 EDT Friday. There may be a little gift Tuesday afternoon COB, equities dove after the 13:00 close.

 

[nnuut]

What to do, stay in the "F" or jump to the "G"? These people think that if inflation rises, which they will if INTEREST RATES are CUT due to the DOLLAR devaluing, BOND YIELDS will rise, this would cause the AGG to to react in the opposite direction. Hard for me to think backwards when dealing with the "F". Any thoughts from you "F" fund GURUS?:worried:
Will the cure be worse than the disease?

Politicians are scrambling to offer a stimulus package, and Fed Chairman Ben Bernanke is slashing interest rates. But they may be paving the way for a bigger calamity down the road.

Fed supporters also point out that the yield on ten-year Treasury bonds stands at just 3.8%, a figure that implies that investors expect inflation to be around 2% in future years. So if inflation is really expected to rage, why aren't interest rates far higher? The explanation is twofold. First, government bonds are hardly a foolproof forecaster. For example, five years ago Treasury yields were predicting 2% inflation over the next five years, and the actual figure was 3%, or 50% higher. Second, investors are so skittish about most stocks and corporate bonds that they're paying a huge premium for safe investments, chiefly U.S. Treasuries. "It's all about a flight to safety," says Meltzer. Stand by for a major rise in yields as the reality of looming inflation sinks in.
So what is the right course for the Fed? Bernanke should hold the Fed funds rate exactly where it is now, at 4.25%. Standing pat might well push the economy into a recession. But the Fed's newfound vigilance on inflation would boost the dollar, effectively lowering the prices of oil and other imports. America would suffer a short downturn and restore price stability, paving the way to a strong recovery in 2010 or 2011.
Sadly, the Fed has already chosen sides. It's likely to lower rates every time growth slows or joblessness rises. As a result, it will never tame inflation until it becomes a clawing, bellowing threat. Then we'll have to suffer a real recession, the kind we suffered in the aftermath of a time we should study and shouldn't forget - the 1970s. [more]
http://money.cnn.com/2008/01/18/news/economy/cure.fortune/index.htm

 

[Fivetears]

Sadly enough, there is no cure for this pending recession. Many will suffer. It will get much uglier (in this day and age) as our economy slowly goes under. The bigger question is "what will we pull under with us?" Damn.

 

[wv-girl]

Sadly enough, there is no cure for this pending recession. Many will suffer. It will get much uglier (in this day and age) as our economy slowly goes under. The bigger question is "what will we pull under with us?" Damn.

What do you think of Cramer's idea? His solution(as well as others, I've heard) suggest rather strongly(only as Cramer can) that Bush bail out the insurers, much like they did with the savings and loan debicle. I think the idea stinks, but if that is what it will take to save the rest of us, we should consider taking the lessor of two evils. Either way I still think it is going down.
btw -- I am one of the stuck ones. Did'nt wake up on Friday until too late for an IFT.

 

[Fivetears]

Bush bailouts are taxpayer funded. I don't watch Cramer any more.
Watch this.
http://www.youtube.com/watch?v=xyiqKfOcl9g

 

[wv-girl]

Bush bailouts are taxpayer funded. I don't watch Cramer any more.
Watch this.
http://www.youtube.com/watch?v=xyiqKfOcl9g

Thanks for the link. Unfortunely, I know a bailout would come from taxpayer's pocket, but it is either that or become a 3rd world country after Saudia Arbia and others give us a "helping hand". At least if the insurers were to be bailed out, we might see some sort of stablization in the currency and the market. Drastic measures are called for now. All of the markets are demanding it.

 

[kar_crazy]

Sadly enough, there is no cure for this pending recession. Many will suffer. It will get much uglier (in this day and age) as our economy slowly goes under. The bigger question is "what will we pull under with us?" Damn.

watz up F T hope you aint draggin bottem of pit like me keep her on the floor and keep her on all 4 good to have you around

 

[Fivetears]

Straddling the fence for now, KC.

 

[nnuut]

Bond market sees more rate cuts ahead

Federal Reserve slashes key interest rate to 3.5% but price spike in the 2-year signals an expectation of further Fed action.

January 22 2008: 10:26 AM EST

A global markets sell-off and fears of a recession prompt the Federal Reserve to cut two key interest rates.

NEW YORK (AP) -- Short-term Treasurys rallied, sending a signal that investors expect further rate cuts, after the Federal Reserve early Tuesday reduced the overnight bank lending rate to 3.5 percent.
The rate cut of 0.75 percentage point followed massive selloffs on global stock exchanges Monday. The market drops reflected growing consensus that the U.S. economy was on the brink of recession and could lead to weaker performance elsewhere.
The recession worries prompted the Fed's monetary policy committee to hold an emergency meeting on Monday, when U.S. markets were closed for the Martin Luther King Jr. holiday, to speed relief to anxious investors.
Tuesday's announcement came one week before the committee's regularly scheduled policy meeting.
"The Fed has cut the funds and discount rates by 0.75 percentage points, citing the weakening economic outlook ... the deterioration in the markets and tighter credit conditions," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "But there can be little doubt the Fed would have waited until the meeting next week if it had not been for the state of the markets."
After the Fed action, stock markets improved in Europe, although Wall Street posted massive losses in early trading.
Treasurys had a more complex reaction, as investors sought to push short-term rates lower by buying them and longer-term rates higher through selling them, a strategy intended to widen the difference between their yields. This sort of trade is known as a "yield steepener."
Short-term notes are the most sensitive to interest rate policy developments.
Heavy purchasing of 2-year notes drove their yield well below the new Federal funds target. This is a classic sign that investors are expecting further declines in the Federal funds target as well as a tactic that puts pressure on the Fed to cut further.
The 2-year note rose 10/32 to 102 7/32 with a yield of 2.08 percent, down sharply from 2.35 percent late Friday. Prices and yields move in opposite directions. http://money.cnn.com/2008/01/22/markets/bondcenter/bonds.ap/index.htm?postversion=2008012210

 

[Skidude78]

I have been looking at the F fund for 2008 as the market continues on the downtrend.
Currently I'm 100% G funds. I am up a bit for 2008 as I have been playing the rallies and getting back out. Normally the F fund would be a good be in a down year for stocks. What scares me about the F fund is 30% mortgage back securities and credit risk. In other words, the bond issuers might not pay because they don't have the money.