[evilgenius]

$this->bbcode_second_pass_quote('jboogy', 'E')vil G , where do you come up with this stuff?I'm as willing as the next guy to prematurely assign nefarious motives to everything TPTB do , but your hypothesis have no readily discernable logic behind them. It has to make sense to somebody , either the evil conspirators or we who mistrust them.
"first they strengthen the dollar"-you haven't been paying attention
"....Iraq in more capable hands"-Iraq is over, not gonna happen
"dollar only swing production status"-been there,trend is away from that and is accelerating
"invite chinee to purchase real estate"-no invitation necessary
"hyperinflate and make europe pay"-hyperinflation and everybody dumps their dollars,it's happening already

[jboogy]

Dow up 320 at one point , started dropping like a stone and 'voila trading curbs implemented.Almost nobodies buying the smoke and mirrors .5 rate drop.
I'm going to keep reading your stuff because it's entertaining Evil but I'm dropping the G for genius designation.

[highlander]

Yes, when the fed cut was announced, they must have dumped another 50 billion into the markets. Then the pigs lined up at the trough, thinking they were actually going to be able borrow against their worthless paper. Guess what, the trough is still empty. DOW is going back down. But expect the central banks to to continue life support as long as they can.
Buy silver, its a bargain.

[highlander]

EvilG
during Saddams time, Iraq was controlled by the sunni.
what are you talking about?

[Eli]

The Fed had to do something because the Yen was roaching to 112.00 dollar level last night the Nikkei lost 874!

People were screaming for a Fed prime rate cut but they can't do it. The markets here might like it but if I have to get back into the Yen that is my worst nightmare. It will be a sign that the US is going to print dollars and I am going to get hosed. The Yen would shoot up and the dollar collapses. There is trillions in Yen that is leveraged around the world.

This delays the crash until the afternoon. lol

I think it really is a gift, to those who have 401ks to get out and into treasuries. Look at the benefits the market has been on a tear the last few years 15% gains seemed like a birthright. No one went broke taking profits off the table.

What is the down side, let's see,.... oh hurricane up the wazoo in Houston gas at 5 dollars a gallon and a collapsing global market. We have 10% shot at complete and total friggin panic.

I won't lose sleep because I decided to sit this one out.

[AirlinePilot]

Eli,

You think treasuries are a good long term play for the 401K? Could you explain that for me? Currently I'm trying to think through what is the prudent thing to do with my 401k. Im in cash at the moment. Right about now Im thinking maybe I should have not contributed so much and gone with more energy and precious metals on my own, but thats water over the bridge now.

[Zardoz]

$this->bbcode_second_pass_quote('evilgenius', 'T')he Bushies wanted a Sunni Iraq from the beginning but couldn't get it with Saddam in power. They have worked it this way to try to get what they want. An economic collapse only helps get the people in line for whatever the Bush people say is in their interests. I have said withdrawal, to facilitate the best situation for a Sunni military coup, and then the troops go back...

[Eli]

OK, this is in no way advice but it is what I think, I am just a guy on the net but this is what I have done and the way I understand things.


Treasuries are about the most secure thing you can get into right now. For them to be worth nothing the government has to go into default, that is mega doomer and would take years, not going to happen soon.

Money Markets are not completely safe some were dealing in part with sub prime, many others also hold commercial paper which is not moving like it should.

I took my wifes and my own 401k and put it into treasuries which is like putting it into cash, you make less interest but it is the safest bet. A 401k plan should have the option to let you move your investments between funds.

I osold more than half of my energy etf , I had made some very good money on that since coming here way back when. Taking the money off never hurts.
The reason I did that is because energy has been run up by housing and the whole market. It will go down a lot but it will be the best thing to buy after the come apart.

And I read some stuff about how gold and silver are not a great play just yet. They have been inflated just like all the rest of the market.

Once we get the melt down, then gold will be good.

What am I risking, I am risking missing out on the Fed finding some way to keep a crazy market going and somehow being able to find another bubble to inflate. I don't think it is possible there is just way way to many things to prevent it. Let say miracles of miracles they did, what happens when of the world finds out KSA is toast?

[eastbay]

AP,

Volatility is the name of the game with energy, as we all know. Just stick with it and you will do just fine. If you want to gamble a bit and pull your money out and put it back in from time to time you have more risk taking nerve than I do. I'm just letting mine sit in oil/oil svc and enjoying the ride... if you call a 17% drop in the past few weeks 'enjoyable'... heh. Don't forget, the 50% increase in the previous nine months was a pretty nice ride too!

Energy will always be in need and the upward trend in prices will carry through all but the most hellish economic disaster... which isn't anywhere near us at this time. Plus, as long as the (very unlikely, but feared by some) disaster is accompanied by inflation, energy will be one of the best places to be.

[mmasters]

$this->bbcode_second_pass_quote('Eli', 'O')K, this is in no way advice but it is what I think, I am just a guy on the net but this is what I have done and the way I understand things.

Treasuries are about the most secure thing you can get into right now. For them to be worth nothing the government has to go into default, that is mega doomer and would take years, not going to happen soon.

[azreal60]

Crash averted thread merged into this one at the request of jboogy.

I will admit, I don't know much about the financial markets. It's an area I'll have to put some study in. But that chart with the arm's resetting, that's easy enough for anyone to understand and go oh s#$^.

[Plantagenet]

$this->bbcode_second_pass_quote('Zardoz', 'D')o you somehow not know that the puppet government we've installed in Iraq is comprised almost completely of Shiites?

[Eli]

Eastbay, I agree up to a point about energy.

But you have to remember it has been driven up by a very long bull run. It will come down a lot. But like you sad it will recover.

Being in the wider market, not so much GM and Ford are toast along with many airlines and what not.

It is always a gamble. I have played craps before and had everything rolling and the numbers were hitting, people are cheering and having a blast. At times like this I like to reach down and grab a stack of chips and put them in my pocket and forget them. Then it is back to the game all the money is out there working, then bam! craps. I walk away sad that I was so close to hitting it big. Later on that night I will reach into my pocket and find the chips I took off the table.

mmasters, at some point it will be about getting around inflation right now I think it is about preventing losses. What the longterm move is anyones guess right now. But a lot of CYA right now seems like a good move.



I used to be a firm believer in just socking your money into a 401k in the Dow industrials, that was until I heard about PO.

[Plantagenet]

"We can only speculate about this, but the decision to move the primary discount rate rather than the Fed funds rate may indicate that the Fed anticipates some institutional failure as soon as today, probably not a bank, but rather an institution that has substantial bank liabilities that may not be able to clear. Markets should not be calmed by this tactic. Unlike the Fed funds rate — which affects all banks’ cost of funds — a discount rate cut only lowers the cost of emergency borrowing by institutions in distress. This move is not going to provide any relief to the overall economy. However, we believe that the Fed’s action and statement today raise the odds of a reduction in the Fed funds rate at the September FOMC meeting, or perhaps even before."

from: –High Frequency Economics Newsletter

[mgibbons19]

Nothing like a capitalist free market.

Nothing like it.

[firestarter]

It's a free market in name only.

Score one for the Fed.

Crash (even the paltry correction) averted until further notice.

[dutchcyclist]

$this->bbcode_second_pass_quote('Plantagenet', '"')We can only speculate about this, but the decision to move the primary discount rate rather than the Fed funds rate may indicate that the Fed anticipates some institutional failure as soon as today, probably not a bank, but rather an institution that has substantial bank liabilities that may not be able to clear. Markets should not be calmed by this tactic. Unlike the Fed funds rate — which affects all banks’ cost of funds — a discount rate cut only lowers the cost of emergency borrowing by institutions in distress. This move is not going to provide any relief to the overall economy. However, we believe that the Fed’s action and statement today raise the odds of a reduction in the Fed funds rate at the September FOMC meeting, or perhaps even before."

from: –High Frequency Economics Newsletter

[TheDude]

$this->bbcode_second_pass_quote('mmasters', 'M')ight be a alright move short term but what about when the dollar becomes the new peso? People don't seem to believe it can happen because America has endured the longest wave of prosperity ever. IMO cash or inverse funds on the growth sectors/housing are good plays now (deflation). Oil companies will be the hot play when the market goes underwater(deflation/stagflation). Gold is the wild card.

[Iaato]

A consensus appears to be forming out there about what kind of a bailout this discount rate actually is:

$this->bbcode_second_pass_quote('', '"')What happened next should erase any remaining doubt that America's free market big talkers have become nothing more than credit addicted phonies. Because, as you may have noticed, their DT's eased within a hour after the Fed injected their drug of choice – billions of dollars of bargain basement priced credit.

And the Fed did not even try to get these junkies into treatment. On the contrary. The Fed actually sweetened the deal, allowing already debt weakened institutions to get all the credit they say they need to remain afloat at wholesale prices.

But wait, there's more. The Fed's fixes are being handed out through what it calls its “overnight discount window.” Discount window Fed loans have traditionally been overnight loans given to banks to smooth the flow of capital between institutions. The loans the Fed approved in the wee hours of Thursday night are 30-day loans.

But wait, there's more. If, at the end of that 30-day period a bank claims it can't pay the money back, the Fed says the banks can roll them (renew) them for another 30-days.. and then another and another. And, like the sub-prime rules that allowed unqualified borrowers to get those loans without documentation or other proof of worthiness, the banks endlessly renewing these Fed “loans,” are not required to prove they really need to in order to remain solvent. (A 'if you can't beat them, join them,” tactic by the Fed.)

But wait, there's more. Since there was suddenly no market for the billions in mortgages and mortgage backed securities these banks were saddled with, the Fed, for the first time, allowed the banks to use those now nearly worthless assets as collateral against which troubled institutions can borrow even more cheap, easy terms money."

[mmasters]

$this->bbcode_second_pass_quote('TheDude', '')$this->bbcode_second_pass_quote('mmasters', 'M')ight be a alright move short term but what about when the dollar becomes the new peso? People don't seem to believe it can happen because America has endured the longest wave of prosperity ever. IMO cash or inverse funds on the growth sectors/housing are good plays now (deflation). Oil companies will be the hot play when the market goes underwater(deflation/stagflation). Gold is the wild card.