|
PureBytes Links
Trading Reference Links
|
Jerry -
That is an interesting problem. I believe that the Fed probably was more
than ready to cut again on 17-Nov and maybe even for the 22-Dec meeting.
But, the recent economic data (ECI, GDP) are saying that maybe its not
the end of the world. Then again, I suspect the bigger problem from the
market's perspective would show up in October data.
The marginal value of each rate cut falls, and the Fed is well aware of
that. If there is major weakness in the economy, or if the liquidity
problems in the bond market (which might be more important than the
stock market anyway, since if corporations cant fund themselves, the
economy will collapse) they will have to go on a full easing cycle and
we'd see 3% funds again, maybe lower. That is not crazy. Europe is
almost there now.
The fear of rate cuts to protect stocks is exactly what the Fed wants us
all to think. They do not want collapsing markets -- stocks or bonds.
Yes, they would go again if the stock market collapses, but I do not
think that they can do it unless we are at and maybe even well below the
lows. Right now, the bears are running scared, and that is fine by the
Fed. They are all afraid of getting blind sided again.
Though I do not like to post my market forecasts here, since it is not
fair to my paying clients, I will say that as far as I can tell, we
should be range trading for a while longer and we are closer to the top
than the bottom of the range - but I do not see a test to the lows now
either. I do expect another leg to new lows in stocks, but that probably
will not be for many months.
Steve
JerryS wrote:
>
> Steve,
> I agree 100%, especially about the feds timing, i went short that
> morning and ended up reversing later in the day, i really think we
> wouldve tanked good from there had he not eased. I have a question
> since i'm on the lookout to get short again; Do you think Greenspan will
> jump to the rescue again the next time we look as vulnerable to a drop?
> This whole scenario is making playing the short side a risky venture.
> TIA,
> jerry
>
> steven poser wrote:
> >
> > I am constantly amazed at what people will believe. What I love best
> > about folks that believe in conspiracy theories, that the Fed buys
> > futures (Earl, though I disagree with you on the futures purchase stuff,
> > you are obviously not in the idiot category.)
> >
> > Alan Greenspan is the consummate market behaviorist and technical
> > analyst. I am not suggesting that he sits there and draws lines, looks
> > at OBV and RSI. But, he may be the only Central Banker in the world who
> > understands how to mollify the markets. I wrote to my clients back
> > before the first rate cut that the Fed would go again between meetings
> > if they only went 25 bps on 29-Sep. I made this call based on how I
> > thought the markets would react, and how I figured Greenspan would react
> > to that. The day that the Fed cut again, was the first time I saw
> > inklings of the market getting ready to turn lower. I think if the Fed
> > had not cut then, we'd be at 6800 now and not 8600.
> >
> > Alan Greenspan almost certainly has no great love for Bill Clinton.
> > Clinton is a Democrat and Greenspan is a Republican. So, Alan is not
> > saving Bill. He is not saving a Republican Congress either that sits
> > there and asks for rate cuts also when the economy is humming along. The
> > FED is and must be fiercely independent.
> >
> > LOOK WHAT HAPPENS WHEN A CENTRAL BANK IS BELIEVED TO BE CONTROLLED BY
> > THE GOVERNMENT (OR ACTUALLY IS CONTROLLED BY THE GOVERNMENT). LOOK HOW
> > ENGLAND AND FRANCE HAVE IMPROVED THEIR ECONOMIES SINCE THEIR CENTRAL
> > BANKS GAINED MORE INDEPENDENCE. LOOK AT THE FRIGGIN MESS JAPAN IS IN
> > BECAUSE THE BOJ IS NOT INDEPENDENT.
> >
> > IF THERE WAS A TRUE BELIEF (AND FOR THAT MATTER REASON TO BELIEVE) THAT
> > THE FED WAS CONTROLLED BY ANYBODY BUT THE CENTRAL BANKERS, THE DOW WOULD
> > BE AT 5000 NO MATTER HOW LOW GREENSPAN PUT RATES. THAT IS HOW MUCH
> > CONFIDENCE WOULD BE LOST.
> >
> > OH, AND THE FED IS ALSO NOT CONTROLLED BY WALL STREET. IF IT IS GOING IN
> > TO SAVE STREET FIRMS, IT IS TO PREVENT A PANIC. I WAS NOT THERE IN 1929
> > WHEN BANKS FAILED LEFT AND RIGHT. DO YOU WANT TO SEE THEM FALL LIKE
> > DOMINOES?
> >
> > Remember, though how Wall Street goes, is not how the whole economy goes
> > (did you see GDP yesterday? -- AND PLEASE DONT TELL ME THE FIGURES ARE
> > RIGGED OR I'M GOING TO PUKE), failures are a different story. The
> > markets are all about psychology, expectations and behavior. Nobody is
> > better at managing that than Alan Greenspan. If it looks as if the Fed
> > is controlled, it is only because knows how to pull the strings.
> >
> > Steve
|