The key to what happens at the October FOMC meeting is likely...

The key to what happens at the October FOMC meeting is likely to depend on jobs. Before we take a look at what might transpire later this month, here is a quick recap of recent Fed actions:In August the Fed surprised the market with a 50 basis point cut in the discount rate on options expirations Friday. The Fed then followed up with a surprise 50 basis point cut in the Fed Funds rate at the September meeting. The market was only expecting a quarter point cut. A tremendous rally in equities worldwide ensued. Nothing Fundamentally Has Changed.

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2006-08-28Today's Thought of the Day starts with an idea...

2006-08-28Today's Thought of the Day starts with an idea posted by Kevin Depew at Minyanville. It continues with my thoughts on the implications of this abrupt shift in consumer psychology. Those implications are massive. Read on and see why. From Kevin:It begins as a simple standoff. The bidders hold their bids. The sellers hold their offers. Activity lurches to a stop... until someone blinks. Of course, I'm talking about real estate, right? No. I'm talking about restaurants. BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? It continues with my thoughts on the implications of this abrupt shift in consumer psychology. Those implications are massive. Read on and see why. It begins as a simple standoff. The bidders hold their bids. The sellers hold their offers. Activity lurches to a stop... until someone blinks. In the face of a meltdown in same-store sales and falling customer counts, some of the
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All eyes were on the Fed's FOMC statement on Wednesday...

All eyes were on the Fed's FOMC statement on Wednesday as if it meant anything. In reality, the statement was irrelevant for the simple reason that no one can possibly believe a thing the committee says. The Action: The Fed cut by 1/4 point in spite of a GDP that came in as a surprise. The Reaction: The dollar sank, oil and gold hit new highs. Those stuck in ARMs did not benefit at all. Mortgage rates are still higher than they were a year ago in spite of a total of 75 basis points (.75%) cuts by the Fed and an additional 50 basis point (.50%) cut in the discount rate. The stock market gyrated wildly but settled pretty much where it was before the announcement. The sad thing is that no one can possibly believe the reasons the Fed gives for what it does. The Fed seems more inclined to wordsmith what the market expects rather than do what needs to be done. Reasons can be made up along the way. It's pretty clear that's exactly what happen. So much for transparency. The committ
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Let's take a look at a point counterpoint discussion of inflation. The October...

Let's take a look at a point counterpoint discussion of inflation. The October 8 2007 issues of Newsweek provides the point: There's No Inflation (If You Ignore Facts). BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Let's take a look at a point counterpoint discussion of inflation. The October 8 2007 issues of Newsweek provides the point: In the first eight months of 2007, the consumer price index—the main gauge of inflation—rose at a 3.7 percent annual rate. That's more than 50 percent higher than the mild 2.3 percent core rate. The prices of energy and food are soaring, at 12.7 percent and 5.6 percent annual rates, respectively, and have been doing so for years. As a result, the CPI—including food and energy—has risen 12.6 percent since July 2003, for a compound rate of about 3 percent. Signs of inflation are evident throughout the economy. When investors fear a rising inflationary tide,
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