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

  1. #21
    great post dave!

    I am among the few who doesnt believe 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 has not given the signal yet. The other day, I made comments in wade's story.

    After reading bernanke's book Inflation Targeting (twice today) I am left with the impression that bernanke does not like to make responsive movements, and that each rate move will be indied long before the move is made.

    All these are extraordinary times, so I wouldnt be really surprised to see a cut next week. But I am leaning toward no cut.
    You may be right on this one. I am reading in all sources that a 0.25% reduction would be too little to take care of the problem. And also this Wed's move in currencies, commodities and stocks were rate cut being priced in.

    So Fed will probably be better off signaling a cut rather than disgusting the market using a 0.25%, which would lead to a big selloff - LOL

    By not cutting, Bernanke will buy time leaving the market within this shadow of confusion he made no effort to dissipate since early August.

    IMHO.

  2. #22
    Senior Member raqwl.deji's Avatar
    108
    Thus Fed will probably be better off indiing a cut instead of disgusting the market with a 0.25%, which would cause a significant selloff -
    LOL!!

  3. #23
    yeah these fed fund probabilities are the main thing which make me think I could be wrong here. But I find some comfort knowing that fed fund futures were wrong (for example 2 months behind) the whole time the fed was increasing rates in the most recent cycle. The prejudice on those contracts appears to be for lower rates.
    Great point; I think there is always a propensity to look at these probabilities in a frequentist sense, rather than an evidentiary (or Bayesian, aka wishful thinking ) sense. It'd be interesting to correlate these amounts. - does CBOT provide access to data on these? (The stuff is just a nicely formatted version of the very same information).


    PS - Apologies to Bayesian believers out there, I shouldn't make jokes about Bayesian procedures, particularly as I am actually using them something else; they are pretty cool.

  4. #24
    Cesarnc - ever navigate through fintag? Their position I great; Bernanke gets 3 options:
    Bernanke's idea for the day
    When I set rates up?
    USD grows more powerful within the Euro, petro-dollar lovin' OPEC happy, oil price falls, unemployment rises, short term credit astrophe, fat bonuses cut at banks, clears out the unsuccessful companies, Bush will hate me, Democrats will be left with a mess when they come in power, danger of US being bought out by a Chinese SWF, wage inflation, my 3 homes fall in value, savings ratios turned into optimistic, MBNA miserable, my fellow economists grant me a Nobel Prize.

    If I set rates down?
    USD collapses, OPEC goes mad, oil prices increase, my set of gold coins drop in value, short term credit crisis eased, subprime goes off, lots of presents from my mates in Goldman Co, will last the Greenspan Set heritage (so will keep blaming him), US turns into Japan circa 1980, equity markets happy, bond markets collapse, MA deals move thru, Private Equity punters pleased, money supply grows, budget deficit worsens, Okun's law kicks in, I get a rewarding job in a leading Investment Bank.

    If I do nothing?
    I lose my job for looking weak and ineffectual.
    http://www.fintag.com/archive/2007/09/10/

  5. #25
    - ever navigate through fintag? Their position I good; Bernanke has 3 choices:

    http://www.fintag.com/archive/2007/09/10/
    LOL.... Wonderful discovering...

    As a matter of fact I could wager one ear and three of my fingers like Fed cut (.25%, .5%, whatever) we will have the first minute panic and like two days after the headlines will be the cut rrreeeaaalllyyy going to solve the problem?

    BOOM CRASH KABOOOOMM across the board...

    Ok, enough joking... From here to Tuesday will be all about speculation gossips and rumours. Some states that VIX index (volatility) will be likely to surge into Aug's high level at the news and at the aftermath. Consequently, if we get the tone of the market, it may be one fine profitable week...

  6. #26
    Senior Member raqwl.deji's Avatar
    108
    LOL!!! So correct! You crack me up man!

    Cesar I understand you've been atcliqforexfor a long time, and oddly I have not read a lot of your posts. Glad to be doing thats just one for the TR!

  7. #27
    Senior Member raqwl.deji's Avatar
    108
    Some says that VIX index (volatility) will be likely to spike to Aug's high level at the news and in the wake.
    Shorting the VIX the day before the fed assembly May Be a Fantastic play, im looking at that trade

  8. #28
    LOL!!! So correct! You crack me up man!

    Cesar I know you've been atcliqforexfor quite a while, and strangely I've not read much of your posts. Happy to be doing theres just one for the TR!
    I just can not help it posting without joking, occasionally too I know... But I have burnt in this market so many times just for the reasons I mentioned. You take the trade, and browse, browse, read, egy, egy, egy, wait. Plus it goes the other way round due to gossips rumours and all...

    And that I wouldn't be surprised at all if this entire cut Bernanke cut!!! Turns into a disaster at the first hedge fund dropping its shoes afterwards... concerns re-emerge, cut appears not working, etc, etc, etc

    We only need to be conscious that volatility will probably pick up big time and if the market determines toward the unexpected direction, there will be a narrow window either to select the trade or to reduce the losses.

  9. #29
    Senior Member raqwl.deji's Avatar
    108
    Fantastic stage NFX... I just re the statement a few more times and it does appear they've shifted toward the growth side of the mandate (btw, I do recognize its a double mandate, I just mentioned inflation since functioned better with the point I was making: ).

    Anyway, here's the announcement...

    Financial market conditions have deteriorated, and tighter credit conditions and increased doubt have the capability to control economic growth going forward. In these conditions, although current data indie that the economy has continued to expand at a moderate rate, the Federal Open Market Committee judges that the downside risks to growth have improved. The Committee is monitoring the situation and is ready to act as needed to mitigate the negative effects on the economy arising from the disruptions in financial markets.
    Of course they announced the discount rate cut in precisely the exact same time (or did dismiss rate come after?) . Initially I thought the discount rate was the answer. But after further inspection, I do see how this may be reduced fed funds' sign.

    Thanks for making me believe!

  10. #30
    In Brazil, we can this a Tub in icy water... LOL

    Why You Need ton't Worry About a Fed Rate Cut
    http://www.cnbc.com/id/20759739

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