Fed musings:
market didn't like it siliconinvestor.com these kneejerk reactions are like inkblot tests, telling what sentiment is. A Fed cut can be good or bad, anything Greenspan says can be interpreted in at least 2 ways
CNBC in the background, murmuring......"people are saying this market is just so hard, it's a tough environment to make money in".....duh........ this isn't hard, this is normal. People have gotten used to picking stocks at random, not listening to CCs or reading 10-Qs, and having their portfolio up 20% for the year. There is a whole class of weak hands who need to get out, out of techs, out of stocks, out of investing, before the markets can bottom.
Fed funds were at 3% from late 1992 through early 1994. We're closing in on that level. Greenspan still sees no inflation risk, although inflation has nearly doubled off its 1998 low. He's probably right, with rising unemployment, falling energy prices. So, the Fed can continue to keep the credit markets from freezing up, continue to put a floor under equities. If consumer spending collapses (and Greenspan has clearly signalled he is watching and worried about this indicator), then he can continue to cut rates, to under 3% if needed.
AJC has been wrong enough times, she is being ignored. The gurus recommend record asset allocation into stocks.......while insider sells/buys is at record levels....this disconnect is rectified by the gurus losing influence. |
