Can Anyone Explain the Feds??

[VJW]

Re: Can Anyone Explain the Feds??

During Carter years, Feds did not have policy in place of adjusting interest rates to curb inflation. This was implemented largely by Greenspan. At that time, US had huge deficits incurred as result of Vietnam War and Great Society (war on poverty, medicare programs, etc) program initiated by LBJ.

"Huge deficits" ???

The largest federal budget deficit during the “Carter years” was $73 billion, about what the current administration racks up monthly.

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[msnln]

Re: Can Anyone Explain the Feds??

VJW, rather than adding anadoctal remarks, care to add some value to the discussion? Your quotes are not adding any value to this thread. I would say Nasdaq decline from 5000 to 2000 is a crash regardless of whether it is coming from right or left.

[VJW]

Re: Can Anyone Explain the Feds??

VJW, rather than adding anadoctal remarks...

I’m afraid you have that backwards, as it was your unsubstantiated remarks that were “anecdotal”. Conversely, my responses are well-documented historical facts.

care to add some value to the discussion?

If you’re interested in my expanded thoughts in regards to the Federal Reserve, I’ve previously posted in several threads to that end:

Greenie Spills The Beans

Feds raised rate to 5%

Your quotes are not adding any value to this thread.

Guess what. Your distortions of history are “not adding any value to this thread”, but in fact DETRACTING from it, by misinforming readers (even if unintentionally). The basis for any discussion, argument, or debate is the facts and reality, otherwise you’re dealing with unsubstantiated beliefs instead of factually based opinions.

A discussion about how fast the sun revolves around the earth is fruitless.

I would say Nasdaq decline from 5000 to 2000 is a crash regardless of whether it is coming from right or left.

Well, as the NASDAQ ended 2000 about where it was 16 months earlier in August of 1999, whereas that index plummeted from 2470 at the start of 2001 down to 1114 in October of 2002, when did the bulk of the “decline” occur ?

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[msnln]

Re: Can Anyone Explain the Feds??

VJW, I will say it again. Unless you have something constructive to add to answer Suze, don't waste your time or mine. I am not going to discuss with you (or have sophomoric argument) whether the market is bull/bear market or some conspiracy with you. I am answering my question based on my degree in finance and 17 years in the industry. You have not said one word in this thread as add to the original question on what the Fed is.

[VJW]

Re: Can Anyone Explain the Feds??

I guess you missed it, so I’ll repeat it for you. I DID add something constructive, I pointed out that you provided false and inaccurate information.

You’re saying you are seeing conspiracies ? I can’t help you with that.

Your “degree in finance and 17 years in the industry” apparently didn’t seem to help with keeping history straight.

Nobody is asking you to read my posts. If you don’t approve of my posts, please do not read them, and most certainly do not reply to them. Nobody is forcing you to do either.

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[msnln]

Re: Can Anyone Explain the Feds??

I dont know what makes you authority on knowledge but you are really annoying and total waste of time, for me and other members of this forum. I guess your "adding something contructive" must have made your day. you are the one who brought up "a well worn canard propagandized by the RightWing noise machine". I read your other posts and it seems pointing out your views as facts is your forte and your sole contribution to this community. Funny how you seem to be monopolizing all knowledge on not just finance but environmental and social issues of the day. All hail the mighty and knowledgable VJW!!

[VJW]

Re: Can Anyone Explain the Feds??

I dont know what makes you authority on knowledge...

Never claimed to be the "authority on knowledge". The historical research is available to anyone.

but you are really annoying and total waste of time...

Strange, you think I’m "really annoying and total waste of time", yet you cannot keep yourself from both reading and responding to my posts. Fascinating.

I read your other posts and it seems pointing out your views as facts is your forte...

Actually, I’ve never presented my "views as facts". As I’ve clearly elucidated, that was YOUR propensity.

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[SuzeOFan]

Re: Can Anyone Explain the Feds??

I read yesterday that the Fed may raise the interest rates a 1/2 point instead of the usual 1/4? Why in the world would they do such a thing??
What ever happened to wait and see??? They seem to be overly rushed in this matter.

Wow! Think what that will do to the millions of people already struggling!
Talk about a heavy burden they're levying on us!

They're going to torpedo the people ...for the sake of this 'so-called' economy!


Still don't get it on the east coast.

[msnln]

Re: Can Anyone Explain the Feds??

Suze, there is a small minority who feels the Fed should just raise the rate by 0.50% this once and stop with additional increases. Majority of us in the industry do not think that is going to happen as this will kill US dollar, making foreign goods such as oil more expensive. Fed Funds Futures indicate chance of this happening is virtually nil but rather, it shows 0.25% this time and 0.25% in September (or October) and then Fed stopping with the rate increase until end of the year. Here are futures quotes:

Futures Rate
Jul-06 5.285
Aug-06 5.410
Sep-06 5.480
Oct-06 5.540
Nov-06 5.565
Dec-06 5.560

[SuzeOFan]

Re: Can Anyone Explain the Feds??

So bear with me, but you're saying the Feds won't stop raising rates until the end of the year?!



I looked up the word 'Inflation' from Wikipedia, the free encyclopedia? and almost wished I hadn't! I got way more than I bargained for. Even the experts can't agree on what constitutes 'inflation'! So frustrating....

Is it safe to say this is all about the Feds trying to keep the dollar from losing value against foreign currency?

[msnln]

Re: Can Anyone Explain the Feds??

From what the futures is telling me, Fed will raise the rate by 0.25% today and most likely another 0.25% in September or October. Most likely, rate will be 5.50% by end of the year, from current 5.00%. Futures rate shows Dec 06 futures rate at 5.56%, which means there is a slight chance Fed rate will be above 5.50%, meaning low probability of three rate increases by year-end.

Fed's main concern is inflation, and dollar losing value is result of inflation. I think I brought this up in an earlier posting but if the inflation goes up, your buying power will go down. For instance, $100 pair of Jeans you buy today will go up to $110 next year if we had a 10% inflation. Pair of jeans will be the same but it costs $10 more, meaning dollar's value has gone down by that amount.

[sweeps]

Re: Can Anyone Explain the Feds??

Hasn't there been a low probability of 3 rate increases for the last dozen or so Fed meetings?

[msnln]

Re: Can Anyone Explain the Feds??

To be honest, I cannot recall how many increases were expected before past increases but the sentiment has definitely changed from continued increases in the past to limited increase, with end in sight. Also, there is article on Bloomberg that says 65% of people polled oppose rate increases. If enough people raise voice, I suppose Fed will have to listen. Last time this happened was in May 2000 when Fed rate was 6%. They raised the rate to 6.5% at the follwing meeting and left it there and started lowering rates few months afterwards.

[SuzeOFan]

Re: Can Anyone Explain the Feds??

Great! I hope the Fed reads this:



****KNOCK IT OFF ALREADY!!****






...we now return you to our regularly scheduled program.

[SuzeOFan]

Re: Can Anyone Explain the Feds??

Fed Rate Hikes Beginning to Pinch Economy
Homeowners, borrowers feeling the impact of two-year campaign:

http://www.msnbc.msn.com/id/13599156/

I'd say most of us have been feeling the *pinch* for sometime already.