Fed Meeting Today

Heather said: "So the Fed meets again today .. do you think that they will drop rates again?"

FirefighterB said: "I sure hope not. If they cut what is expected, the funds rate will be below the inflation rate and cause a(nother) bubble. But, things suck and people don't seem up to accept that fact, so I'm pretty positive they'll do something rash that only considers the current situation; not the future ramifications."

Raharu Haruha said: "in accordance with my other thread, i think they will cut. They have to inorder to keep employment up."

FirefighterB said: "...we'll be one step closer to stagflation."

lil dickie said: "They plan on cutting I am sure."

SporeMonger said: "They are too afraid not to cut. They screwed up enough."

marketnewbie said: ".25 cut and the dow will fall because the traders are expecting .50"

JAP said: "I say they'll cut 0.50. Any less and the market will [B]not[/B] like it."

AlfredSokol said: "Cut the damn thing to Zero. Just give the damn money away! :)"

Harry said: "[QUOTE=marketnewbie;62585].25 cut and the dow will fall because the traders are expecting .50[/QUOTE] Generally agreed."

marketnewbie said: "why do they care so much about pleasing the financial markets? Their main goals are to keep inflation down, and "soften" recessions/slowdowns."

Justin08 said: "What do you think now that the GDP came in lower than expected??"

LongArm said: "[QUOTE=marketnewbie;62635]why do they care so much about pleasing the financial markets? Their main goals are to keep inflation down, and "soften" recessions/slowdowns.[/QUOTE] I believe their main goal IS the latter, despite all the opinions to the contrary you'll hear on investing forums (;))."

FirefighterB said: "I moved this from another thread I posted it in; it makes more sense here. I remember Rickster saying that the Fed cuts based on what prices the treasuries are trading at. Now, I don't want to misquote Rickster, so please correct me if I'm wrong, but I think it was the 10 year Treasury. Every previous cut that I have paid attention to (since Sept.), the 10 year treasury was far below the Fed discount rate and the Fed cut it's rates to be very close in line with that number. However, right now, the 10-year is only 0.05% behind the 3.75% benchmark at 3.70%. If I am right in quoting Rickster and my observations, this leads me to believe the Fed won't cut at all or, if they do, it'll only be 0.25%. I don't know if I understood correctly, so please let me know if I'm way off."

Airelon said: "[QUOTE=Justin08;62643]What do you think now that the GDP came in lower than expected??[/QUOTE] Economy is slowing down . . . Poor thing is trying to take a breath with all the horrendous housing situation that is out there . . ."

lil dickie said: "The consumer is not spending money. With housing as slow as it is we are not gonna avoid a recession no matter what."

Heather said: "I think that consumers (and businesses) are taking an extra minute to decide whether or not to spend. I think that overall consumer confidence has got to be down. A lot of people aren't going to get credit even with the rate cut.."

JAP said: "[quote=JAP;62601]I say they'll cut 0.50. Any less and the market will [B]not[/B] like it.[/quote] Market rallied all the way to 1385, then pulled back to 1353... weak!"

Corey said: "Bah. I am disappointed with myself. I said I would buy SDS @ $60. It went all the way down to $60.02, I got scared, and now its at $63. Ugh. Interesting AMZN numbers today guys. Seems the consumer still has a bit of gas left..."

Airelon said: "Erases all of the pop up. Wow. Just . . . wow."

1997zj said: "63.5 in ah!! my shoutbox wont load =("

Airelon said: "I'm noticing some cheerleaders starting to try to talk Value. Gotta give them credit for trying."

1997zj said: "sds at 64.25 in Ah.. this sell off might finally show people how bad this market really is.."

Corey said: "S&P eminis @ 1330. Damnit zj, damnit! I said I would buy @ 60! Why didn't I? WHYYYYY?!"

JAP said: "Market continuing to sell-off in AH. IMO, it's all downhill from here. :bricks:"

FirefighterB said: "Ya know, this pisses me off a little more than I thought it would and makes me hope even more for a crash. This constant lowering of interest rates is only going to help keep this asset bubble going, which means my chances of being able to REASONABLY afford a house in the next 5 years or so are going to be nil. If the market just dropped like it was supposed to and the Fed focused on inflation and keeping our Dollar from becoming so worthless that it can be used as toilet paper, as they are supposed to be, we might have a better chance at reasonable home values again. But, no. Instead we'll just keep the Debt Supercycle going and keep pushing up debt rates and lowering savings rates. Because, hey, an indebted society with lots of shiny shit is WAY better than a society that saves money and isn't concerned with materialistic BS. ...off the soap box...for now."

Rbreb13 said: "The bond insurer downgrades around 3:00PM killed this rally. S&P AH is downgrading some mortgage backed bonds. Looks like the bad news trumped the good news."

Harry said: "[QUOTE=lil dickie;62684]The consumer is not spending money. With housing as slow as it is we are not gonna avoid a recession no matter what.[/QUOTE] Seems to be a key factor in the whole dynamics. Can't say gas prices isn't playing a role accross the board. Gas will increase soon as the suppliers change from the winter blend to the summer blend...WHATEVER THAT MEANS...I heard it on Bloomberg yesterday. How can we spend more if our wallets and pocketbooks are bleeding."

Harry said: "[B]U.S. Economy: Consumer Spending Slows, Claims Rise [/B][url]http://www.bloomberg.com/apps/news?pid=20602014&sid=apjme685RnPg&refer=ecalendar[/url] [B]U.S. Initial Jobless Claims Rose to 375,000 Last Week [/B] [url]http://www.bloomberg.com/apps/news?pid=20602014&refer=ecalendar&sid=a9JcwLUYFZsg[/url]"

LongArm said: "[QUOTE=FirefighterB;62649] I remember Rickster saying that the Fed cuts based on what prices the treasuries are trading at. Now, I don't want to misquote Rickster, so please correct me if I'm wrong, but I think it was the 10 year Treasury.[/QUOTE] Well, it wouldn't be based on the 10-year treasury, it would be the 3-month t-bill. If you look at a chart of the two, the fed funds rate does tend to "follow" the t-bill rate, it's true. But the t-bill rate moves, in part, based on where sophisticated bond investors think the FFR will go. If bond investors think the fed will lower rates a week from now, they will buy their bonds today, thus lowering bond rates NOW (and ahead of the fed). So while it LOOKS like the FFR is simply following t-bill rates, it's likely the other way around (just in reverse order). Also, bond yields and the FFR generally react to economic and inflationary factors the same way, so the two are likely to move in roughly the same direction anyway. The relationship between t-bill yields and the FFR is complicated, though, and there are different theories out there. But this is how I view it based on all I've read. Rickster's a smart guy, though, and he may have a slightly different view. As for 10-year treasuries, they tend to track the FFR much more loosely than the shorter-term treasuries. You could say they "meander in the same general direction...sort of.""

Raharu Haruha said: "-.- why did gold fall then? I just bought my gold company two days ago, auy at 16. Now it's at 15.98 -.- wth, it's supposed to go UP when things go DOWN."

FirefighterB said: "The answer is in your question: because you bought it. That's why it went down. ...I'm just giving you a hard time, but it always seems to happen that way. Of course, if we were really good enough to pick tops and bottoms, we'd be loaded."