7 replies to this topic

[saltlake]

[BearItch]

Yeah, baby, how about Uncle Ben sprinkling some of that magic rice on the market? Wheres dat Uncle Ben anyway? Poole got his tongue?

[saltlake]

[IYB]

2-year TSY's now about 115 basis points- at aound 4.1% - below target fed funds, depending on which second you look at ticker. Hundreds of billions of presumably "smart money" are betting that those rates need to be locked in now before they disappear. Otherwise they put money into higher yeilding TSY Bills. CD's, and overnight instruments. It's WAY out of Ben's control whether they cut. His only discretionary elements are when and by what increments. He'll do his best to make it look like he is in control, though, so I think "emergency cut" will be his last resort. I don't rule it out, but if Ben has his way, it will be at the regular mid-Sept meeting...or later. Jmho. D

Edited by IYB, 16 August 2007 - 02:45 PM.

[saltlake]

Agreed Iyb, Uncle ben has to cut. When and how much is the question.

[pdx5]

Oh yes, the Fed needs to bail out the big banks and mortgage lenders who made all those sub-prime/no documentation/no money down/no interest/ loans! But the guvmint better not bail out all those poor people who can't afford healthcare or housing. Will hypocracy ever cease???

[IYB]

Oh yes, the Fed needs to bail out the big banks and mortgage lenders who
made all those sub-prime/no documentation/no money down/no interest/ loans!

But the guvmint better not bail out all those poor people who can't afford healthcare
or housing.

Will hypocracy ever cease???

"all those poor people who can't afford healthcare or housing" would become unemployed by the 50's of millions if the Fed were to sit on their hands forever as the credit crisis becomes a total credit meltdown. That's what this is about- not bailing out sub-prime lenders. They are already gone! And many of the Alt-A lenders are already gone as well, and the credit crunch is now threatening the availability of capital for conforming borrowers as well- you know- that poor guy who otherwise couldn't afford housing.

The Fed needs to and ultimately will act not to save the lenders, but to throw a lifeline to "all those poor people who can't afford healthcare or housing". Ands that's as it should be.....D

[pdx5]

Oh yes, the Fed needs to bail out the big banks and mortgage lenders who
made all those sub-prime/no documentation/no money down/no interest/ loans!

But the guvmint better not bail out all those poor people who can't afford healthcare
or housing.

Will hypocracy ever cease???

"all those poor people who can't afford healthcare or housing" would become unemployed by the 50's of millions if the Fed were to sit on their hands forever as the credit crisis becomes a total credit meltdown. That's what this is about- not bailing out sub-prime lenders. They are already gone! And many of the Alt-A lenders are already gone as well, and the credit crunch is now threatening the availability of capital for conforming borrowers as well- you know- that poor guy who otherwise couldn't afford housing.

The Fed needs to and ultimately will act not to save the lenders, but to throw a lifeline to "all those poor people who can't afford healthcare or housing". Ands that's as it should be.....D

But, but, IYB...have'nt you heard that the balance sheets of corporations are in better shape
than in a long time, that profits are holding up very well, that insiders are buying stocks in
large numbers, that unemployment is at 4.5%, that the stock market is still 80% higher than
its low 4 years ago, that Asian economies are booming with China & India growing at double digit
rates (where every 2 out of 5 people live), that there is no other superpower threatening us with
nuclear armageddon, etc. etc.

I just don't see the reason for the Fed or the government to push the panic button yet. May be
if the unemployment climbs a full one percent or the market drops another 10% or if SPX profits
begin to falter etc then it is time for Fed to take action. Just not yet.

So, the folks who should have never bought houses they could not afford will lose them.
So we will go right to the beginning, with those folks going back to renting. Not a real big deal.

Edited by pdx5, 16 August 2007 - 06:40 PM.