40 replies to this topic

[thespookyone]

Nav-Call it "market forces", "they", "them", or what you will-I never stand in front of the direction their bus is going. A simple cursory glance at a time in the market when the liquidity is being poured in like a Great Lake was just emptied shows me "a force" exists. Can I prove it=or identify "them"-no need. I do, however, suspect it's not all the moms and dads in the country in touch by phone, taking their lunch break at the same time on a pre-arranged basis-and agreeing to buy the same ten stocks that ramp the market up. I have no idea who is driving trucks 70 miles an hour down the highway-and I don't step in front of them either. OGM, you are missing a couple points. One is that the nature of man is optomistic-no matter what reality might be. Another is that at this point, moms and dads trade roughly 20 to 25 percent of the market-hardly a controlling interest. We don't really trade the market, or the economy-rather peoples perceptions of such. And really, it's just a matter of timing in the market unless you are a buy and hold forever type-which I have not noticed you to be. My take is if you want to see a real bear market-think April.

Edited by thespookyone, 29 November 2007 - 10:09 PM.

[SemiBizz]

The Feds are not Market Makers, they are Market Facilitators... it's the dumbest thing you ever saw, they just print money...

[NAV]

The Feds are not Market Makers, they are Market Facilitators... it's the dumbest thing you ever saw, they just print money...

Semi,

Just a few minutes back, you said, Fed guys are theatrical clowns. Now you say, they can print money i.e power to control the financial destiny of many. It's this kind of contraditions that renders fundamental analysis useless. Again, i ask you "What is it ?". Or they clowns or potent fellas ?

Conditions of the business cycle got worse, like Bernanke and Kohn said.

OGM,

This didn't say "has worsened". They said "could worsen". Read it carefully. Or maybe you are right. With GDP at 4.9%, the business conditions could not have been more worse. Oh, wait a minute, that 4.9% is all just gummint lies.

Nav-Call it "market forces", "they", "them", or what you will-I never stand in front of the direction their bus is going. A simple cursory glance at a time in the market when the liquidity is being poured in like a Great Lake was just emptied shows me "a force" exists. Can I prove it=or identify "them"-no need. I do, however, suspect it's not all the moms and dads in the country in touch by phone, taking their lunch break at the same time on a pre-arranged basis-and agreeing to buy the same ten stocks that ramp the market up. I have no idea who is driving trucks 70 miles an hour down the highway-and I don't step in front of them either.

Spooky,

In other words, you are acknowledging that Fed is a force to reckon with.

Edited by NAV, 29 November 2007 - 10:29 PM.

[ogm]

This didn't say "has worsened". They said "could worsen". Read it carefully. Or maybe you are right. With GDP at 4.9%, the business conditions could not have been more worse. Oh, wait a minute, that 4.9% is all just gummint lies.

If GDP 4.9% matters and if everything is so great, why is the Fed FRENTICALY cutting rates ?

[thespookyone]

"Spooky, In other words, you are acknowledging that Fed is a force to reckon with." BET IT

[milbank]

I was waiting for the "gotcha" part to comment. Everytime I'd start a post though, I'd stop and think "geeesh, this is too long and involved" so I'll say this. You are correct NAV. The Fed doesn't "start" anything. I do blame them for, as you called it, facilititating. I blame Greenspan for his lack of foresight in promoting ARMs the way he did without jawboning Congress to reign in the lax standards that anyone who saw Johnnie Woo on "his" yacht with his arms around those two bikini babes hustling how "YOU could live like ME by buying properties with no money down!" etc, knew this was all going out of control and would end badly. Greenspan used his Bully Pulpit to promote one end the one the Greedies wanted without promoting the other end, responsible ARM lending practices until it was way past the point of no return. The Fed isn't responsible, of course, for all of it. They supplied the means and Greenspan allowed and jawboned some of the way. Elected government with it's deregulations to "grow capitalism more freely," spearheaded by presidents both in Republican and Democratic (Clinton) administrations, pushed for deregulating irresponsibly in many ways, the banking industry, lowering standards for banks and lenders and easing oversight and enforecement of the regulations still in existence. I blame the investment banks for levering 20 to 1 etc. and I blame the rating agencies who were in bed with said banks and didn't do the job of really knowing EXACTLY what they were applying rating to. I've gone into the whole anatomy of the crisis we are now in more thoroughly before. To approach this as a "is the Fed totally responsible or not" situation is a simplistic, trick, "gotcha" setup. If I thought the Fed was totally responsible for the mess we are in, I'd be cheering the rate cuts too but, I know that those cuts are akin to trying to staunch a sliced artery with a band-aid. Jeesh! This is still too long.

[NAV]

This didn't say "has worsened". They said "could worsen". Read it carefully. Or maybe you are right. With GDP at 4.9%, the business conditions could not have been more worse. Oh, wait a minute, that 4.9% is all just gummint lies.

If GDP 4.9% matters and if everything is so great, why is the Fed FRENTICALY cutting rates ?

IMO, it's bacause the market is demanding it. Look at the T-Bills and the Fed Funds rate spread. Why is the market demanding a cut, when the economy is growing at 4.9% and the stock market is only 5% from it's highs. Cuz the crowd is still greedy.

[pedro]

Fed prints money in exchange for Treasury IOUs. The so called lower rates that the Fed merely follows, well those rates would be higher without the Fed stepping in to buy those IOUs. That's why the Fed was created in the first place .. a guaranteed buyer of last resort. If the Fed is merely a facilitator in the grand scheme of things .. then how is it that from 1807 to 1907 there wasn't much NET change in the US price level? But since the Fed showed up .. to print money ... collect bonds and earn interest on money it prints for nothing to buy those bonds ... prices have risen 20 fold, or more? Because rates are lower than they'd otherwise be absent this bond mkt gorilla. Its their buying of these bonds (and other CBs like them) that have driven the market down in the first place .. ha ha .. which they then supposedly follow .. hah!

[milbank]

As the great philosopher, John Stewart said to Alan Greenspan when Greenie spoke of our "free market economy"... "So, why do we need a Fed? Wouldn't the market take care of interest rates and all that? Why would we have someone adjusting the rates if we are a free market society?"

[ed rader]

I basically blame everything on Jimmy Carter...even today

the only way i could blame carter today is if GWB were his illegitimate son....and we all know carter only lusted in his heart .

ed rader