Fed's next move could be to lower rates / Hedge Funds MWHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
September 11, 2008
– Comments (5)
I came across the following article on CNN this morning and I said to myself, "Ahhhhh, they're finally starting to get it."
Fed's next move could be to lower rates - The central bank is likely to keep its key interest rate at 2% at its September 16 meeting but expectations are growing for a rate cut before year's end.
I have been ranting and raving for months now that there's absolutely, positively no way that the Federal Reserve will raise interest rates any time in 2008, or even early 2009 for that matter. In fact, on a number of occasions I have said that I would not be surprised in the least if the Fed's next move was to cut interest rate rather than to raise them.
We're coming up on an election so right there it makes it extremely unlikely that the fed would raise rates before November. Add to this the fact that job losses are accelerating and the fact that the government desperately needs the housing market to stabilize and banks to recapitalize their balance sheets and there's NO WAY that the Fed was going to raise rates. Add to this the fact that the price of oil and many other commodities have dropped precipitously over the past month (much too quickly in my opinion, but that's what happens when hedge funds have to unwind and short sellers start to pound on things) and the fact that for some mind boggling reason the U.S. dollar is soaring to the moon and all of the hawks who were crying for the Fed to raise interest rates don't have a leg to stand on.
So here we sit, with absolutely no chance of a Fed rate hike, the U.S. economy in terrible shape, the federal deficit growing exponentially as the government bails everyone and their mother out, on, and on, and on and somehow the dollar is sitting at its highest level in a year? I really need someone to explain to me how this is not anything more than a surprisingly large bear market rally. Seriously, please use the comment section of this post to explain to me why the dollar rally will last. For the life of me, I can't figure out how it will.
By the way, this is a fantastic quote from the above article:
"With this in mind, one economist said that so-called inflation doves, those who argue economic weakness is a greater threat than inflation, have ample reason to call for a rate cut.
"Like Prince said, 'This is what it sounds like when doves cry,'" said Bob Brusca of FAO Economics, who is predicting that the Fed will lower rates before the end of the year.""
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This next headline just makes me laugh:
Hedge fund managers lose money again in August
MWHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
Deej
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