Posted on 09/18/2007 2:43:25 PM PDT by Always Right
Unless of courese, the ECB wants to avoid this all by selling Euros and buying dollars. Can they buy enough $?
Bernanke cuts a couple of rates .5%. 90 seconds later the YTD increase on my equity portfolio advances 19%. Thank you Mr. B. Time to take some profits, pay 15% capital gains before Hillary is elected.
yitbos
I made 4%+ in my portfolio today on gold, oil, shipping, foreign bank stocks, and of course, my trading position in Gol-damn Sachs.
End of October is when we will see the disaster from the decision. The funds will close the books with cash in hand and never look back with all hell breaking loose. I would be out of the market by October for sure and into commodities.
We have not even hit the peak ARM adjustments. Next month $50 Billion of them are due to reset at a 10% or higher increase in required monthly payment.
And I bet most are linked to LIBOR, which will be unaffected by the fed cut. Homes are still overpriced by a good 20% in many markets. Some markets are already back to 2003 prices.
You wouldn’t be tooting this horn if you found out you were one of the unemployed.
Are you implying that the Fed should act to keep GDP positive, no matter the consequences for the value of the USD?
I don’t think that recessions are necessarily a bad thing, even if I lose my job. The long-term prosperity of the country is too important to justify monetary bailouts for hedge funds and Ponzi households.
Hank
Why is a Fed cut a bailout if an increase isn’t an intentional crunch? Why is it one way and not the other?
Foreign buyers may still buy long American debt, but they will demand an inflation premium like in the 70s. Then the full effect of the Bernanke Put will become evident.
>>Why is it one way and not the other?
It isn’t. An increase is an intentional crunch, which is what the Fed should do to get inflation under control.
Actually, what should happen is that the Fed should be abolished, and interest rates should find their market price without attempts at countercyclical monetary policy. It won’t happen, but it should happen.
It's always fascinating to see yet one more "real cause of the Great Depression."
We can put that idea in the ring with the contraction of the 20's credit boom, the collapse of rural banks, the Smoot-Hawley Tariff, the collapse of margin in the stock market, and let it duke it out for the title of "The One Real Cause".
Don’t spoil the party. Bernanke just spiked the koolaid, so drink up.
The second point I agree with.
The cause was the over tightening of the money supply in response to the boom. Smoot-Hawley did not help, but it in no way the cause. If the fed had allowed enough money into the economy, we could have recovered.
I’ll join the tear-jerkers. I just want to go on record as a bear on one of these threads, so that when the Market does a repeat of 200-2001, I can say “I told you so”. Hope I don’t have to eat crow. Or dollars. But then, my dollars are less filling than they were 50bp ago...
I see all these bulls acting like we are in the midst of a recovery, rather than being atop a recovery born on the shoulders of easy money and rampant consumer spending bouyed by consumers with their heads in the sand, spending paper profits from fake, temporary housing appreciation.
Consumer confidence is going to go down with the death of housing, dragging consumer spending and tanking that resulting 70% GDP. The market may not tank as deeply as 2000-2001, but I am guessing the chart will look similar.
Just my 2 worthless cents. I’m not as unhappy that I am on the sidelines with cash waiting to get back into the market after the fall, as I am unhappy to see the Fed just drag out the duration and increase the magnitude of the pain. Again, just my 2 cents.
So put me down with the rest of the grumpy, tear-stained bears...
Why are renters deeply saddened?
Mortgage rates on 30 year fixed loans for those with good credit just went down 50bp. Now we just have to wait until housing prices bottom out as well. As Hovnanian’s 20% fire sale shows, home prices have a looooong way to fall yet for us renters with cash looking to buy a home. I hope the Fed cuts another 100bp before I decide to buy a reset foreclosure.
In the Fed's confidence game, nothing is more important than confidence.
What we saw yesterday was an attempt to restore confidence.
It will fail because psychology has been irrevocably shifted in the past 5 weeks after the toxicity of high asset prices was exposed for all to see.
The emperor haveth no clothes.
BUMP
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