Stock Capitalist

The Fed is in a tough bind. I know there are frightening things happening in the credit markets and banks and Wall Street is clamoring for rate cuts . We saw the near collapse of Countrywide Financial a few weeks ago and England’s Northern … At the same time though inflation is accelerating as oil prices hit all-time highs and gold breaks through $700 an ounce and the DOW is only 1.7% off of its all-time high. Look the Fed saved the stock market from crashing on August …

Instead, Bernanke chose the most aggressive action, by slashing the fed funds rate. Looking at the chart above, what impact would a series of Fed rate cuts have on the DJ Commodity Index? The Sept 21st edition of Global Money Trends ….. Insightful analysis and predictions of the (1) top dozen stock markets around the world, Exchange Traded Funds, and US home-builder indexes (2) Commodities such as crude oil , copper, gold , silver, the DJ Commodity Index, and gold mining …

My judgment is there is enough of a risk that the Federal Reserve should be responding by cutting interest rates ,” Feldstein said on. Since the credit market crisis unfolded in early August, the Bernanke Fed has pumped $292 … Could this explain why the Dow Jones Industrials and other global stock market indexes have not shuddered at the sight of crude oil soaring to $82 per barrel? Remember when oil prices at $40 /barrel sent global stock markets into a frightful tizzy? …

Overshadowed by the Fed’s decision to cut interest rates and the subsequent rally in global stock markets was a much more critical story. U.S. Secretary of Treasury Hank Paulson recently urged Congress to raise the national debt … The U.S. dollar has gone from being backed by gold , then oil , then the U.S. military. Gold is probably the most misunderstood investment asset class due to great short-term volatility in the price of the underlying commodity and gold stocks . …

The U.S. currency has lost 5.7 percent this year versus the euro as traders bet the Fed would cut interest rates while the U.S. economy slowed. The European Central Bank’s benchmark interest rate is 4 percent. ….. Having devaluated the dollar, US stock is cheaper than before. Expect foreigners to buy up everything in sight. Tourism and the Chinese fake souvenir industry will flourish. Posted by: jaim klein at September 20, 2007 10:10 AM. The Fed lowered rates for one …

Financials weigh on Asian stock markets . Financial Times, 18 September. Asian stocks fell on Tuesday, as financial shares lost ground amid concern about spreading turmoil in credit markets, while energy shares gained as US crude hit an … The dollar remained subdued ahead of a widely expected interest rate cut by the US Federal Reserve later on Tuesday, while safe-haven status kept gold within striking distance of a fresh 16-month high of $719.65 an ounce set on Monday. …

The stock market and the teetering hedge funds are counting on an interest rate cut , but they’ve ignored the effects it will have on the greenback. If Bernanke lowers rates—as everyone expects— the bottom could drop out of the dollar. …. “ The forthcoming easing of monetary policy by the Fed will not rescue the economy and financial markets from a hard landing as it will be too little too late. The Fed underestimated the severity of the housing recession, …

Brinker believes that the Fed will be “dragged kicking and screaming” into lowering the discount rate on September 18th. The only thing that Bob Brinker is NOT certain about is how much they will lower rates –1/4 or 1/2 of 1%. … A caller asked about buying gold . Brinker said that if the caller was expecting “run away inflation” and wanted to buy gold , that he would advise using the exchange traded fund, GLD as a way to invest in gold in the stock market . …

Every time there has been a financial crisis , the Fed has opened the money spigots and poured liquidity into the stock market to mute the impact on the real economy. The “Greenspan put” was a bet that “Easy” Al would respond …. A stronger Euro can act as a quasi tightening mechanism by shielding Euro zone importers from higher costs for crude oil and other raw materials. The ECB is also under pressure to cut interest rates , at a time of out-of-control Euro M3 growth. …