I say futures will be down 0-50 on the dow this morning.
The dollar is getting KILLED, 1.49..... I also Finaly Heard it, Maket starting to look for .5-1 point cut in the Fed funds rate...... Hear we come 1.6-1.7 Dollar Euro......
Monday, January 14, 2008
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6 comments:
Morning Eric,
After going through bloomberg news today - Fed Signals More Aggressive Response to Faltering Expansion, I have a comment on the Fed. Fed is extremely stipud. Given the current bear sentiment , if they signal why they don't ACT NOW - Feb could save the market by a tiny action like lower the discount rate (though it may short term to simulate the market) Will it be too long to wait until Jan FOMC meeting if you know that the market will get worsen?
A quick and smart action could save the market, that the difference between Greenspan & uncle Ben
Morning,
This is definitely the Quandary our economy Faces.
When you look at the EPIC recession we had in the 70's. Massive Inflation was killing our economy, and it took a series of "Rate Hikes" to Reverse the inflation trend.
a Bull would say, the deflationary effect of the market, and the bank losses, will out weigh the inflationary forces of the rate cuts. Stimulate the economy, and we are saved.
Bear says, "You can't grow an economy with Inflation.". It's not like we are up at 3-8% and have alot of room to cut, all we have are about 1-2 more % points. and it's done.
Japan had this same problem and have been at 1%, for 10 years, and have had a Terrible economy.
The question is who is right....
Have you seen commodity prices lately?
Paid for a gallon of gas?, Gallon of Milk, Insurance costs?, Property Tax?.....
All of these things show double digit inflation. Regardless of what the CPI and PPI say.
The Fed Can cut to 0% and it won't help the Economy.
But it can definatly shock the market.
But it also wouldn't be the first time I was wrong
:)
i agreed with you rate cut would not definitely save the market, but at least give investor confidence. Wall street now are fill with fear of recession. Fed should step in to do something - at least ease the fear. ACT before to market get worsen or it will too late. Where is the stimulate package???
It can save the market, short term...
One needs to remember that the affects of inflation drives the market up too.
Just like gold.
Stocks are Real assets, So when they devalue the Dollar, it drives the market Up.
If you track the dollar value during the bull, there was a direct corollary between dollar weakness and an up market.
Realize that the Dollar is down 20% in the past 5 years, Did the market go up 20%? no, that is why I believe we have been in a Recession for quite some time.... The "bull market" we have experienced, was created by inflation.
But you can't grow the economy with Inflation.
Hey, Thanks for disagreeing with me. Without disagreement, I don't learn anything.
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