maybe somebody will rob them one day -g-
from mr. moto email tonight:
Dear Subscriber:
The $7.25 billion in temporary funds added by the Federal Reserve, on Monday morning, should not be considered a part of or player in the later price rally in the share market indices. The repo rules, derived from an historical study of Fed operations in the open market over a period of several years, would, in fact, have the market flat to lower today. Which is not to say, however, that some type of federal effort was not involved in today's trading session. Mr. Peter Fisher, former head of the New York Reserve Bank's Market Group, chief of open market operations and main facilitator of the LTCM bail-out, was not appointed to his current U.S. Treasury post without good reason. The Fed would be the Treasury's agent in nearly any type of market involvement. The current US Presidential Administration, when arriving in office, was also only too aware of what financial and economic conditions prevailed.
Japn's Ministry of Finance was in the currency markets last night to support the dollar, and on several occasions; which makes today's share price rally all the more suspect, in that a failed forex intervention was backed by support later in the day for one of the dollar's chief underlying assets.
I write you tonight to also amend the statement in Monday's letter which indicated there is no evidence the Fed's policy committee will reduce its target rate on Wednesday. Indeed, at that writing there was no such evidence. However, data released today increase the possibility of a rate reduction to about 50-50 but favoring only a 12 basis-point reduction rather than the customary 1/4 percent or 25 basis points. Not a magnificent amount, and one that probably means there will be no reduction at all. Yet, I thought I would mention it.
I do not regularly have an opinion on rate moves by the policy committee; but, that I have broken with that custom, an update seemed the thing to do.
Tuesday is a typically light day for the Fed in the marketplace. So, let's see what transpires tomorrow. Extreme pressure (equal to or greater than $20 billion in Treasury collateral) in the form of propositions submitted would indicate renewed professional/commercial interest in share purchasing.
Figures for chain store sales are typically leaked ahead of the slated release time at 9:00A, on Tuesday. CSS numbers from both the BTM and Redbook Surveys are known to be volatile and normally garner little more than passive interest. The market will, nevertheless, perk its ears a bit tomorrow for some insight to the sentiment of the American consumer. Fairly good figures are expected. Any leak of information to the contrary may be reflected in the overnight or pre-market activity. Consumer Confidence, released at 10:00A, may dampen spirits, but confirmation and more recently received data will be available in the ABCNews Money Poll on Wednesday.
See you soon.
Moto |
