[roccman]

Well here we are again...

The fed cut last time as predicted by some and I think they will cut again.

All failed empires have monetized their debt.

What say you?

[idomar]

Do we really know the extent of the 'credit crunch' 'sub prime slime' whatever the talking heads on the MSM call it?

Merril Lynch post an $8 billion dollar write down today, not a loss as they haven't actually liquidated any of their crappy assets yet. There is the $80b billion 'super SIV' to, as far as i can make out, transfer the crap that is out there into one place AND THEN sell them on to someone else..........not sure i would want to invest in this myself.

The ARM resets that will occur over the next 2 quarters will really start to hurt those that are financially stretched. What will the FED do?

Cut - Send the dollar even further down and the nominal value of oil up, increase the outflow of funds by foreign investors

nothing - leave the masses to their fate

raise - ha ha ha...........up yours mortgagee's

I am going with a rate cut of 25bps followed by another next time round, instead of a 50bps cut this time.

the death knell is sounding for the American economy.

[Utopia]

If they cut the rate again, the flight from the dollar may start to reach epic proportions.

How long before China realizes that it's american paper assets perhaps are better used as toilet paper. They have already been offloading the dollar to a point, a rate cut may spark a panic selloff which they really don't need right now.

But if they don't cut the rate.... lol

Talk about a catch 22.

If they do anything it will be a .25 I think, It wont go over well regardless.

[Byron100]

If they even *think* about cutting rates this time around, I'm going to be one ticked off mofo. Can't they see that the housing / credit markets are toast no matter what they do? Even a first-grader should be able to figure that one out...jeeze.

The time might be getting real close when I stick a American flag in the back window of my car...upsidedown, that is.

[roccman]

$this->bbcode_second_pass_quote('', 'R')ogers: Dollar Losing Reserve Status,
Headed for Steep Decline

Is the U.S. dollar, right now 65 percent of the world’s reserve currency, in danger from the Chinese yuan?

Billionaire investor and market guru Jim Rogers says so. In fact, he has warned of it for several years, although he specifically told investors at an event in Amsterdam Tuesday that the time had come to sell all dollars.

“The U.S. dollar is and has been the world's reserve currency, the world's medium of exchange,'' reported Bloomberg, from a presentation Rogers conducted in Amsterdam on Tuesday. Chairman of Beeland Interests, Rogers co-founded the Quantum Fund with George Soros, which appreciated 4,000 percent over 10 years while the S&P rose 50 percent.

“That's in the process of changing,” Rogers said at the event. “The pound sterling, which used to be the world's reserve currency, lost 80 percent of its value, top to bottom, as it went through the whole period of losing its status as the world's reserve currency.''

[perdition79]

$this->bbcode_second_pass_quote('Byron100', 'T')he time might be getting real close when I stick a American flag in the back window of my car...upsidedown, that is.

[FoxV]

The simple truth is that the Fed didn't cut to save mortgage holders. That's just the line given to the asshats on the boobtube.

The Fed lowered rates because Short term lending rates (the banks source of funding) was higher than long term lending rates (the banks source of revenue). So banks were taking a hosing because of a -0.30% yield spread between long term and short term debt (an inverted yield curve)

Want to know what the Fed will do this meeting. Take a look at the yield curve between 3 month and 2 year debt, and there you will find the answer.

Current yield curve

Orange is last month with a -0.3% difference so we got a 0.5% rate cut
Green is this month with another -0.30% difference so we'll get another 0.5% rate cut.

Dollar? Mortgages? Chinese? bah, the Fed is a bank in charge of banks so it will do what is best for banks.

Got Gold?

[evilgenius]

I'm going for a 25 bp cut because it will send the price of existing bonds higher. It will undermine future auctions if the trend continues, but that point isn't yet. It looks like they are going with a policy of keeping the Chinese and ME investors onboard as much as possible and hurting their ability (potentially) to float future debt. It was a choice they made when they cut last time.

What happens if they trigger a sell signal by over inflating bond prices is anybody's guess. I suppose the Fed looks on the bond market as self-correcting.

I believe that the Fed expect the UK to lower as well. That will save them from heightened competion with as least one European currency, not, however, the one they ought to be concerned about. I think the BoE will also cut by 25 bp.

[heroineworshipper]

Cramer says 100bp. Bankers always win. Savers always lose. Either save your boss's home equity by paying $8/gallon or B unemployed.

[eastbay]

A half point decrease. Any more sends the message things are out of control, and any less will be inadequate to offer liquidity to help calm markets.

More importantly for the near-term is, what has the market already factored in? I can't figure this one out. The 'expert' opinions by the usual guru's are too diverse, as usual.

[roccman]

$this->bbcode_second_pass_quote('FoxV', '
')
Orange is last month with a -0.3% difference so we got a 0.5% rate cut
Green is this month with another -0.30% difference so we'll get another 0.5% rate cut.

Got Gold?

[Roy]

Roccman,

I think you're right on the money.

The Fedsters have already conclusively demonstrated where their loyalties lie. They are going to attempt to bail out the banks and Wall Street.

Again, the lower 98% of us (annual earnings less than $200k) will bear the brunt of it. Collapsing value of the USD, inflation and all that.

Notice the delta in prices at the grocery store since the last rate cut, not mention the USDX?

"I feel like I'm ridin' on a downbound train". Bruce Springsteen.

[Byron100]

$this->bbcode_second_pass_quote('Roy', 'R')occman,

I think you're right on the money.

The Fedsters have already conclusively demonstrated where their loyalties lie. They are going to attempt to bail out the banks and Wall Street.

Again, the lower 98% of us (annual earnings less than $200k) will bear the brunt of it. Collapsing value of the USD, inflation and all that.

Notice the delta in prices at the grocery store since the last rate cut, not mention the USDX?

"I feel like I'm ridin' on a downbound train". Bruce Springsteen.

[roccman]

$this->bbcode_second_pass_quote('Roy', 'R')occman,

I think you're right on the money.

The Fedsters have already conclusively demonstrated where their loyalties lie. They are going to attempt to bail out the banks and Wall Street.

Again, the lower 98% of us (annual earnings less than $200k) will bear the brunt of it. Collapsing value of the USD, inflation and all that.

Notice the delta in prices at the grocery store since the last rate cut, not mention the USDX?

"I feel like I'm ridin' on a downbound train". Bruce Springsteen.

[Twilight]

I think a 25bp cut.

Last month's -50 was nuts, but then so is their plan, and so is the situation they're in. I think they took the view that the middle class is screwed anyway, and hammering it with inflation a year or so earlier than it would melt down otherwise, must seem an acceptable sacrifice. Still, they won't want to weaken the dollar too fast, as that could bring on the banking crisis they are trying to avoid. I think they will be more cautious this time.

[roccman]

Tick tock tick tock...

Bucky is not looking well today...

http://quotes.ino.com/chart/?s=NYBOT_DX&v=w

as low as 76.62...

hmmmmmmmmmmmmmmmmmmmm.....

I think Bendover does not care.

Oh well so it goes.

[Plantagenet]

THE U.S. ECONOMY GREW 3.9% in the third quarter, despite a much heavier drag by the housing sector, amid surging exports and stronger consumer spending. However, economists still expect a significant slowing in the current period.

--wall street journal

---------------------------------------

Surprisingly strong growth in the third quarter, but with the Bush expansion getting a bit elderly after six straight years, and real estate market problems still developing, the economy must eventually slow, and a recession has to happen sometime.

The low dollar is definitely helping US exports, but I'd hate to see it go lower.

My guess is no change in the fed rate now, because of the strong 3rd quarter GDP growth, although I wouldn't be surprised to see a quarter point drop.

[WhatMeWorry]

Stocks rise on rate cut bets
Wall Street keeps it positive on expectations that the Fed will lower interest rates again; GDP growth tops forecasts, inflation reading mild.

Stocks Rise