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One view I heard was the first cut could have been half a point that the
market expected. The unexpected .25 rate cut was done unexpectedly for
emphasis with the additional .25 in the discount rate to instill public
confidence back in the market. A recession in the US right now would defeat
any attempts by Japan and all of Asia to come out of their recession and
waste any efforts by the G7 and IMF. Money that has left our market and for
the most part gone into money markets will go back into the market with a
confident public. If the market waits to long to regain public confidence
then it will to other places than the market. All eyes both here and aboard
are watching our market for direction. I don't think Greenspan really minds
that we have a minor recession that normally follows a boom we have seen
but the timing is dangerous for the world. That kind of danger can put us
along with the world into a global depression. That would be a lasting
hardship taking many years to workout of. They also said we might get
another rate cut soon as next week.
Robert
mr_bond@xxxxxx wrote:
>What I don't get is why the fed would intentionally wreak havoc with the
>financial markets like that. I have a rule that I never have a trade on
>in front of an important Fed announcement, but there is just no way to
>prepare for that kind of carnage. Greenspan had to know that this would
>cause some serious margin calls, perhaps bankruptcies, for potentially
>50% of the traders with positions in the futures markets. I hope he has
>a clear concience about that.
>
>Dave
>
>
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