Hoping Fed will deliver hefty cuts in interest rates

Mar.16, 2008 in Market Outlook, U.S Hot Stocks

“After Bear Stearns, they’ll likely cut by more than was previously thought to show the market that they stand ready to provide as much liquidity as needed,” said Paul Nolte, director of investments at Hinsdale Associates.

After the Bear Stearns news, market bets that the central bank will cut interest rates by 75 basis points next Tuesday jumped, pricing in a 100% chance of such as move, compared with 88% previously. The market also sees over 50% odds of an additional 25 basis points — which would bring short-term interest rates to 2% from the current 3%.

So who will be next after Bear Stearns? Who has the next-worst exposure? Anyone have any opinions? I had some puts on Bear Stearns and also have puts on Lehman brothers. Plus I also have some puts on Key Corp (Key) and National City Corp (NCC). I know that they all report earnings next week. I hope they drop like a stone….

Low interest rates courtesy of the FED, dow having fallen already close to 20% from the top, more money being pumped into the system…this environment is conducive for a major rally.

Expecting the market already to have bottomed out last friday..now looking forward to the bull run.

I will venture to say we will drop monday, rebound tues, and crash in september—if Obama elected, then interest rates hiked and a huge trillion dollar implosion on derrivatives.So are you ready?

My guess, 7800-8000, maybe lower. Those eurodollars are sucked into a huge blackmarket,right now, sine tax payer participation, and are being redeposited abroad.Then those banks flush with eurodollars will come back into the US market and buy back their rms length bretheren once the tax code changes. After that, cd’s and a deflated dollar will pile up with emphasis on deflationary lending, at less than 1% par.

Does anyone here have anyone that owes them money?Have you been paid back with inflation indexed dollars ? If so, relend it and watch it dissappear into whatever and come back worthless if it comes back. Where it goes, nobody knows, that is unless of course you keep it under a lock and key as collatteral thereby increasing money supplr and relending to yourself to purchase gold to balance the current account to get better Libor to relend to yourself to relend to yourself ad infintum.

Trust and integrity are what makes a system work. Where does all that funny money go? Houses on islands wit hig food storage basements? Gizmos and tv’s and xray machines for the new deveolping world? Big 50k tires for a mining truck? Clay ovens for primiive Guatemalan womem? The money does go somewhere, but does it ever come back if the stewards are sticky fingered? Not.

No need to worry about inflation. Primary source of inflationary pressure is coming from crude oil. which i think will start to deflate soon. Oil has gone up too fast too soon without any corrections along the way. The world economy cant be sustained with the oil price being set by OPEC.

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