The differences between 1929 and Today

[The once and future king]

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Perhaps you should think in real terms nominal terms. Sure the market went up on the 50bp, but the dollars it was price in lost a huge amount of value. Nominal, not real, gain.

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Yea but I am talking about price action.

Or are you suggesting that upward trends are a calculated attempts by markets to compensate for the loss of value in the dollar that any fed cut will cause?

Roughly estimating on the fly (I could look it up but I cant be far out)I would say the DJI has gained about 9% in the last year. Its gone from circa 12200 to 13300 reaching 14200+ on the way (after the credit crunch started) so dollars in the DJI will have retained value much better than dollars kept under the mattress or in a standard saving bank account. That 9% is also alot bigger than CPI (CPI LOL).

I see entirely the point you are making, but it is not relevant to my arguement. I am rejecting the point that Equity markets react via price action to events in the real economy by stating that the price action (in recent history) is mostly motivated by events in currency manipulation.

[Copernicus]

[ QUOTE ]
[ QUOTE ]
Perhaps you should think in real terms nominal terms. Sure the market went up on the 50bp, but the dollars it was price in lost a huge amount of value. Nominal, not real, gain.

[/ QUOTE ]


Yea but I am talking about price action.

Or are you suggesting that upward trends are a calculated attempts by markets to compensate for the loss of value in the dollar that any fed cut will cause?

Roughly estimating on the fly (I could look it up but I cant be far out)I would say the DJI has gained about 9% in the last year. Its gone from circa 12200 to 13300 reaching 14200+ on the way (after the credit crunch started) so dollars in the DJI will have retained value much better than dollars kept under the mattress or in a standard saving bank account. That 9% is also alot bigger than CPI (CPI LOL).

I see entirely the point you are making, but it is not relevant to my arguement. I am rejecting the point that Equity markets react via price action to events in the real economy by stating that the price action (in recent history) is mostly motivated by events in currency manipulation.

[/ QUOTE ]

So the decline in oil prices, the confidence in the dollar shown by Abu Dhabi's investment in CitiCorp, robust retail sales are all minor effects compared to a discount rate cut that could have been anticipated and priced into the market after the last Fed meeting (and I believe was)?

The realization that there was an over-reaction in the markets to the sub-prime problem had nothing to do with the recovery it was all the Fed?

Things are much more complex and robust then you are willing to admit, because of your political agenda.

Back in August I said that the Fed should shock the system back into equilibrium with a 50 bp reduction in the discount rate, and was disappointed it was only 25. I also reported the belief of one of the major investment firms itn the country that an immediate 50bp cut would be sufficient to drive the Dow up to 15,000 in short order. If they were correct, the subsequent actions of the Fed are nowhere near fully priced into the market (unless they have already been offset by the Hillary effect, which I don't believe to be the case). There is a lot of upside to go before the Dems drag things down, imo.

[lehighguy]

There is no political agenda here. I can simply go to the source and actually think about it.

http://www.federalreserve.gov/releases/h6/hist/

[Copernicus]

[ QUOTE ]
There is no political agenda here. I can simply go to the source and actually think about it.

http://www.federalreserve.gov/releases/h6/hist/

[/ QUOTE ]

what is this supposed to be a repsonse to?

[The once and future king]

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Things are much more complex and robust then you are willing to admit, because of your political agenda.

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I dont have any agenda, Im not American and I am not an Acists, Im just calling it as I see it.

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(unless they have already been offset by the Hillary effect, which I don't believe to be the case). There is a lot of upside to go before the Dems drag things down, imo.

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Your agenda is plain to see.

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I also reported the belief of one of the major investment firms itn the country that an immediate 50bp cut would be sufficient to drive the Dow up to 15,000 in short order.

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Thanks for making my arguement for me.

[Copernicus]

[ QUOTE ]
[ QUOTE ]

Things are much more complex and robust then you are willing to admit, because of your political agenda.

[/ QUOTE ]

I dont have any agenda, Im not American and I am not an Acists, Im just calling it as I see it.

[ QUOTE ]
(unless they have already been offset by the Hillary effect, which I don't believe to be the case). There is a lot of upside to go before the Dems drag things down, imo.

[/ QUOTE ]

Your agenda is plain to see.

[ QUOTE ]
I also reported the belief of one of the major investment firms itn the country that an immediate 50bp cut would be sufficient to drive the Dow up to 15,000 in short order.

[/ QUOTE ]

Thanks for making my arguement for me.

[/ QUOTE ]

I didnt make your argument for you.

Fed action --> increases liquidity from an artifical contraction ----> allows fundamental strength of the economy to be reflected in prices

NOT

Fed action ---->artificial liquidity---->market increases due to perception of liquidity