>>>The response time of the market to interest rate cuts is slow. The 1% drop in Fed funds in the last month may still be too late to stop the cycle of declining sales and earnings. How many people here are going to go out and buy a new PC next week because interest rates were lowered?
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Michael, it's obvious you haven't followed any of my posts in the past. Zeev and I had the very same conversation, when I stated economies thrive whenever households need a revolutionary product, such as the PC or the cell phone. And, the quality of such devices, and the supply of those devices have overcome demand. That is the sole reason the economy is the shape it's in today, and it's not going to get better anytime soon. Because, households have already purchased an adequate PC or cell phone, and do not need to run to Best Buy for an upgrade. I have stated emphatically, that there is so much supply in all consumer products and services, that it will take years to sort out.
However, that doesn't mean markets will have a nice pop to the upside, before all the negative news begins to spew out. As of now, the negative news is being bought, because the news isn't that worrisome. Manufacturing data is down, but in today's economy's of scale, manufacturing can stop on a dime, and start back on one too. Markets don't like uncertainty. What will ultimately provide a shock to the market is upcoming unemployment data, horrible earnings in April, and the fact interest rates are not helping the situation. But, this will all play out in the months to come, not now. We were due for a bounce, we have gotten a bounce, and we will continue to go higher in the short-run.
>>>How about- the Fed printed some more money so institutions could go more heavily into debt to purchase securities<<<
My friend, I witnessed first hand what these criminals have done all year long in 2000, with regards to using the networks as there allies to get big clients in and out of stocks. You can BANK on the fact that they are ALWAYS in the know, and THEY control the movement up or down! That is a FACT. Therefore, if the institutions want to place borrowed money into securities, then they have a pretty good knowledge that markets are going higher, or else they would place their money into bonds, and short securities as indicative of the last 6 month run in bonds.
I can tell you this. Some pretty big players invested HEAVILY into CSCO @ 36 bucks. I have stated this time and time again, if CSCO doesn't break through 36 to the downside, this market is only going higher for the short-term.
regards,
KM |
