Stock Rally Vanishes After Fed Rate Decision
Posted November 4th, 2009 by Michael Nystrom
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On November 4th, 2009 DaddyWarBucks says:
Don't be short too long...
Nobody knows what I know.......nobody.
Barack Obama, Salesman of the year for firearms, ammo, gold and silver .Admits He Is A Muslim http://www.youtube.com/wa...
~~ ~~~ ~~~~ ~~~ ~>> "Is Anybody Out There?"
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The big indexes finished
The big indexes finished about even on the day, but real estate and the small cap indexes were down. REIT's were down 2%.
Financials didn't do so hot,
Financials didn't do so hot, either.
http://bigcharts.marketwa...
Don't be short too long...
Barack Obama, Salesman of the year for firearms, ammo, gold and silver .
~~ ~~~ ~~~~ ~~~ ~>> "Is Anybody Out There?"
http://www.youtube.com/wa...
The major fund managers get the "whisper number"
typically a day ahead of time, they buy on the "rumor" which drives the price up and then they sell on the "news".
Pop & Drop
Just as I predicted.
Fed Statement
http://www.federalreserve...
Market
Still trying to figure out what all the language means.
--------
Official Statement
Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up. Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency debt purchases, while somewhat less than the previously announced maximum of $200 billion, is consistent with the recent path of purchases and reflects the limited availability of agency debt. In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Once they decipher all the text...
...and figure out what it all means, it will be the weekend!
By then, 8 more banks will close.
I may not know the truth, but I know when I'm being lied to...
more of the same
... the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability.
Fed will continue to manipulate.
... will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt.
Fed will continue to promote cheap mortgages because if mortgage rates increase the housing market will fall down.
... these transactions will be executed by the end of the first quarter of 2010.
Fed will have plenty of time to revise and extend the manipulation timeline.
Bloomberg article http://www.bloomberg.com/... The Federal Reserve restated its intention to keep interest rates “exceptionally low” for “an extended period” ...
Things are bad with no risk of economic pickup pulling inflation through the system. "Extended period" isn't short term (first quarter 2010).
For now, business as usual.
They will not acknowledge inflation
until it's too late.
"Doing nothing is almost always an option and is very often the best option." Daniel Hannan
Audit This - What Tools?
... the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability ...
Can someone audit these guys and tell me what wide range of tools they are talking about.
Variations on
Variations on counterfeiting, as well as mass emotional manipulation of hope & fear.
No Change
Market shoots up 141 ....then plunges.... Now up only 82
It is a super long statement.
Spike
EURUSD spiked up..... retraced back to 1.4840... pre-announcement plateau.
Cheers,
G.
Where can I watch it live?
Where can I watch it live?
announcements calendar
These are not "live".... i.e. to the "second"..... but damn close...
and it's free.... most other "live" broadcasts (Bloomberg etc.) require subscription (last time I checked :) )
http://www.forexfactory.c...
there's an icon that appears just before any pending announcement
refresh the page until the data posts.... typically 3-5 sec of announcement.
Cheers,
G.
My prediction at 2:04pm
I think we will get a pop up right after the announcement, but a sell-off later today, or at latest by the end of the week. I think this is the last gasp for stocks.
Just as Bob Prechter would say...
Somebody has been keeping up on their EWFF. :)
By the way, I agree with you (and Prechter, Hochberg, the whole crew).
Just as Bob Prechter would
Just as Bob Prechter would say... Gold is going to $680 and lower. Oh wait.
Rate rise...
about 13 minutes and counting.....
There has been a push to strengthen the dollar against the Euro
going on near 10 days.... since last Sunday night/Monday morning.
It's clear that a 1.50 EURUSD is "unacceptable" to the Europeans.
The market has been push up / drift down ever since.
We are at the 1.4840 mark and holding pending the rate announcement.
We were at 1.4620 for a low yesterday.
A strengthening dollar is wanted by the Central Banks at this point to push back towards the EURUSD 1.4000 mark (imo).
I think it's time.
I'm predicting a quarter point rate rise.
We'll see. :)
The market may hop around a
The market may hop around a bit, but if there's nothing new but slightly changed rhetoric, not much will happen.
Elliott Wave's Free Week
Has just started, for those interested in their take on the market:
All market reports free for one week.
They usually gloss over reality and paint a pretty picture.
Considering how damaging a market crash could be to the economy and their reputation, I feel sure it will be blue skies and suzy sunshine.
Plus any major negative event would also boost support for RP's audit bill.
Most likely the language will remain the same ...
and the market will spike up.
Any change in language and the market will spike down.
I have a feeling that they may indicate that they are more concerned with deflation rather than inflation which would also cause the market to spike up.
WAHOR!!
http://www.dailypaul.com/...
Deflation fears in Europe & the US
http://www.dailypaul.com/...
You may be right. Bernanke has a mortal fear of deflation, as any central banker should. Their motto is: Inflate or die!
But he must try to walk a fine line between inflation & deflation, if it is at all possible.
The ultimate fallacy, I think, is that he is in control of anything.
He pretends to be in charge, and they pretend to let him as long as their interests are served.
hasnt bernanke tried every trick he promised...
he would try to ward off deflation--- remember the helicopter piece----
he has tried all of the measures he said he would take---
none have worked...
now what....
It is debatable as to
It is debatable as to whether it 'worked'
I think the coordinated actions did manage to hold off the second great depression, for now.
The Fed has basically been doing that since 1987, but they're only postponing the inevitable.
But you're right, it does seem that he's out of bullets now.
Here is his deflation speech:
http://www.federalreserve...
thanks michael...
out of bullets...
i hope everyone here is out of debt....
also-- thanks michael for talking about this issue a while back--
your take- combined with the folks over at theautomaticearth-- have really helped me out....
we will see.. A prudent man
we will see..
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Wait until Prime decouples from discount ...
If that happens, we will be at or near the point of no return.
It almost happened when the Fed lowered the discount to zero.
Then things stablized.
I am waiting for a lottery where the FED pulls out several billion numbers and says,
"O.K. any FRN with this number as the serial number, is no longer worth anythig."
It would virtually eliminate any and all hard currency in the larger bills. Everything will be electronic and it will have the effect of decreasing M1 while maintaining or increasing M3 by reducing the total amount of foreign held currency which is about 50% of the total of M1.
After reading "To Big To Fail" and finding out at least some of what happened last year behind closed doors, I will not be shocked by anything the FED or the Treasury does.
http://www.dailypaul.com/...
WAHOR!!
http://www.dailypaul.com/...
I think BB takes his orders from the central bankers on a daily
if not hourly basis. He is to much of a whimp to be making decisions.
Really the only thing they can do is to flood the world with dollars and hope if they can keep things afloat long enough, that the fundamentals will correct themselves and begin to build a new base. In my opinion the existing US culminative debt is too large and too overwhelming.
Of course the logical thing for the American people to do, is declare the national debt unconstitutional (especially the unconstitutional wars) and write it off due to fraud.
I've seen many of these Fed announcment days now
And what I've noticed recently is that whatever direction the stock market is trending prior to the announcement, it usually reverses course after the statement is released.
Let's see what happens today. At present, Dow up 133; Nas up 18.5.
Will the Fed attempt to defend the dollar? They must be getting spooked by the price of gold.
Out on a Limb....
about 45 minutes and counting.....
There has been a push to strengthen the dollar against the Euro
going on near 10 days.... since last Sunday night/Monday morning.
It's clear that a 1.50 EURUSD is "unacceptable" to the Europeans.
The market has been push up / drift down ever since.
We are at the 1.4840 mark and holding pending the rate announcement.
We were at 1.4620 for a low yesterday.
A strengthening dollar is wanted by the Central Banks at this point to push back towards the EURUSD 1.4000 mark (imo).
I think it's time.
I'm predicting a quarter point rate rise.
We'll see. :)
Holy "Moral Hazard"
Batman!
E Pluribus Unum