Do Not Yell At Me For Discussing Fundamentals -
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thread: Do Not Yell At Me For Discussing Fundamentals

  1. #11
    I will not yell at you; I thought it was a nicely argued POV. Thanks for putting the time in it.

  2. #12
    Senior Member raqwl.deji's Avatar
    108
    Post dave!

    I am among those few who doesnt believe the fed will cut rates. The employment report made me second guess this concept, but came back to my senses.

    My argument is based on something... the fed has not given the sign yet. I made remarks the other day.

    After reading bernanke's book Inflation Targeting (twice today) I am left with the impression that bernanke doesn't like to create responsive moves, and that every rate move will be signaled long before the move is made.

    All these are exceptional times, so I wouldnt be so surprised to find a cut next week. But I am still leaning toward no cut.

  3. #13
    Member ina99's Avatar
    98
    great post dave!

    I am one of those few who doesnt think the fed will cut rates. The employment report made me second guess that concept, but I came back to my senses.

    My argument relies on one thing... the fed hasn't given the signal yet. Comments were made by me in wade's story.

    After reading bernanke's book Inflation Targeting (twice today) I am left with the belief that bernanke does not like to create responsive movements, and that every rate movement will be indied long before the transfer is made.

    All these are exceptional times, so I wouldnt be surprised to see a cut that week. But I am still leaning toward no cut.
    Merlin, or anyone who'd love to remark, because many people are ready expecting a rate cut do you think no switch to rates, could be obtained by the market the identical manner as an increase normally would. Under normal conditions, it could be treated similar to an increase in fact because so many are expecting a cut?

  4. #14
    Senior Member raqwl.deji's Avatar
    108
    I am expecting the fed to give the signal of rates in their statement. A rate cut and the signal of a rate cut usually have exactly the same effect, therefore I think the fed will stray too far out of the market's expeions by not making the move straight away. Which is another reason I dont think we'll see a cut. . .the fed understands by signaling they could have exactly the same effect. And this would be a move that is reactive, and bernanke is on not portraying a image BIG.

  5. #15
    The implied probability of a half stage fed cut is so dominant at the moment which I would envision that holding company would actually tank the stock market; a quarter stage OTOH would show a sympathy for the poor hedgies while at precisely the same time likely just cut the market moderately, state a few hundred points. Only a guess here (personally I think they should increase rates...)
    The attached image is courtesy the cleveland fed:
    http://www.clevelandfed.org/research...unds/index.cfm

  6. #16
    .. .the chilly Central Oregon mornings lately...
    Nice article Dave, and see as if you did a little homework to reach that viewpoint. And how can I find fault with a Oregonian?

    . . .still warm on the Oregon coast.

    Cheers,
    Thom

  7. #17
    Junior Member alexml22's Avatar
    23
    Saying yes, Oregon, what a fantastic state to reside in - quality of life is excellent! Glad you are enjoying it.

  8. #18
    Junior Member alexml22's Avatar
    23
    The implied probability of a half stage fed cut is indeed dominant at the moment that I would imagine that holding firm would actually tank the stock market; a quarter stage OTOH would demone a sympathy for the poor hedgies while at the exact same time probably just cut on the market moderately, say a couple of hundred points. Only a guess here ( I think that they should increase rates...)
    The attached image is agreeing the cleveland fed:
    http://www.clevelandfed.org/research...unds/index.cfm
    Legitimate stage - the market would in reality get whacked if rates aren't cut and a lot of individuals (i.e. Wall Street) will eliminate money and be very pissed off! Merlin's point is valid and in-line with my thought - it isn't the Fed's task bail out and to respond, but this issue is so big that it has impacted the macro prognosis sufficient to feel justified.

  9. #19
    In the CBOT web site as of now 9/12/07:

    Depending upon the September 11 market near, the 30-Day Federal Funds futures contract for the October 2007 expiration is currently pricing in a 100 percent probability that the FOMC will reduce the target rate by 25 basis points from 5-1/4 percent to 5 percent at the FOMC meeting on September 18.
    In addition, the 30-Day Federal Funds futures contract is pricing in a 72 percent likelihood of an additional 25-basis point decrease from the target rate to 4-3/4 percent (versus a 28 percent probability of just a 25-basis point rate reduction).

  10. #20
    Senior Member raqwl.deji's Avatar
    108
    Btw, if the fed retains rates, yet the statement says we will need to rates and will do so in the subsequent meetings is that so distinct that really cutting rates? Is that the fed will appear less reactive, which I think it is a positive.

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