8 replies to this topic

[SemiBizz]

There were two very clear paths.

1) No Cut - We were told the economy was doing so well that there was a risk of inflation... that was no news to anyone who buys food or gasoline, but those aren't counted, of course.

2) Cut Rates - For whose benefit? Are Julio and Juan, the two illegal immigrant workers near Modesto, CA with their combined 7 children and 2 wives in the four bedroom house they were able to buy a few years back benefitting from Bernanke's Cut? How about the retired grandmother who lost her husband a couple of years ago who signed up for cash from a fast talking mortgage broker? No, those folks aren't getting any breaks....

It's all for Wall Street... Whatever the Fed does... it's to save Wall Street. It was true in '87, it was true in '98 and it was true on 1/3/01... and here we go again.

You see the choices were... to hold the line and try to correct the mortgage and R.E. Bubble the fed created...

or to lower rates, kill the US $ and give the US Economy a temporary reprieve... but what was the cost of that reprieve?

OIL - Somebody had a good idea this rate cut was coming. The oil prices were a good indicator.

GOLD - Oil is priced in gold these days... believe it or not.

Let's read between the lines in the statement by looking at the effects of the action... Here's how it SHOULD read:

As we told you in our August post-FOMC statement, the economy is doing just fine, in fact we are still worried about inflation. It's not really necessary, nor warranted, to make a cut in interest rates at this time based on economic justifications. On the other hand, the Federal Reserve has responsibility for credit issues. We have decided to sacrifice your currency in order to preserve the rally that Wall Street is currently enjoying. We cannot accept even a 5% pullback in the stock market because that would give an impression that we don't have it, as well as all other aspects of the economy, like housing, under our control. So we have decided at this time to deflate our currency rather than our assets.

Now, of course, the net result is the same... unless you decide to do something stupid like move your assets out of the US. But with all due respect...if you had a brain you moved those assets out of the US when Greenspan was telling you to go get a variable rate mortgage. In the meantime, as long as you remain residents and citizens of the US... why worry about your currency? Unless you have to drive or eat... you'll be just fine

.

[NAV]

You are funny

[...]

I enjoy your volume analysis, but this sort of stuff looks like it got lost on its way to CapitalFool.

[SandStorm]

Congradulation on your smh buy yesterday, SemiBizz. That was fine trading. You are absolutely right. 50bps cut ain't gonna help the poor sobs who bought homes at bubble highs whose ARMs are resetting 200bps higher on average. The housing sector is done, period. It does help Wall Street by keeping at least the stock market aloft, giving the illusion that all is not lost, so that bankers and investors can continue to lend and take risk elsewhere in the economy. We can only hope that we will make better investments this time around and get enough returns to cover interest payments to the dumb foreigners who provided the funding with their "savings glut." As for the need to reverse the global imbalance? Why, that's next Fed boss' problem. LOL . . . Ben is a wimp and a liar. He is not concerned about inflation as suggested in FOMC minutes. He is paronoid about DEFLATION. As a result, he will be even more accomodative than Greenspan. I took off my long hedge today, exposing myself to short side again. What do you think?

Edited by SandStorm, 19 September 2007 - 03:53 AM.

[johngeorge]

Here is what Boris has to say about the Fed:

<h2 class="date-header">Dear Readers, we had a bad day today. No, we did not lose money( gained on the initial trade, lost on the follow up), but what transpired was despicable. NATIONAL CASINO IS CLOSED FOR TODAY. SOPITALISTS sold honest savers/earners of America again. Looking in their EYE'S they have spat in it and said, "here rat, you deserve to be our slave, and you are, just keep working and living rat's life and transfer your savings to us". I can not explain the pain I feel for, SENIORS/STUDENTS/SINGLE MOTHERS/FAMILIES WITH MODEST MEANS. Hear the celebration on wall street, SOPITALISTS, keep spitting right in your faces REAL AMERICANS, when will you wake up...
</h2>
1) Start by selling the $USDollar, we warned you for months that SEPTember will bring acceleration of $US decline
2)Buy and hold forever Core holdings of GOLD 5/10% before final and total confiscation, SOPITALISTS plan for your money.
3)Learn hard to invest ( not trade , that is harder and takes longer time) and let your money grow.

http://borisc.blogspot.com/

I think today is a good day to go short with TWM.

Edited by johngeorge, 19 September 2007 - 06:39 AM.

[OEXCHAOS]

I think that this is the wrong week to short. They're going to be relentless. Mark

[SemiBizz]

Whatever day the boom gets lowered now... there will be no one short, and that's how the boyz like it...

[humble1]

i would not be surprised to see two more 50/50's at the next two meetings. i TOTALLY AGREE that bb's aim is to take the fed out of the crosshairs. the job of these people is to KEEP their jobs. but at ~ 3 3/4 he will have to stop and the fed will be above criticism. imho !

[SemiBizz]

Let's read between the lines in the statement by looking at the effects of the action... Here's how it SHOULD read:

As we told you in our August post-FOMC statement, the economy is doing just fine, in fact we are still worried about inflation. It's not really necessary, nor warranted, to make a cut in interest rates at this time based on economic justifications. On the other hand, the Federal Reserve has responsibility for credit issues. We have decided to sacrifice your currency in order to preserve the rally that Wall Street is currently enjoying. We cannot accept even a 5% pullback in the stock market because that would give an impression that we don't have it, as well as all other aspects of the economy, like housing, under our control. So we have decided at this time to deflate our currency rather than our assets.

Now, of course, the net result is the same... unless you decide to do something stupid like move your assets out of the US. But with all due respect...if you had a brain you moved those assets out of the US when Greenspan was telling you to go get a variable rate mortgage. In the meantime, as long as you remain residents and citizens of the US... why worry about your currency? Unless you have to drive or eat... you'll be just fine

.

The Fed: 'Wall Street's b*tch'