The indication that finally the Fed has awoken to it's badly
mistaken policy of the last 6 months has helped the
markets, as it should. However, in the past you only got
sustained bull moves based on interest rates when the Fed
dropped discount, not overnight, rates several times in a
row, according to Marty Zweig's book.
I also am suspicious of today's graph. Big pushes from the MMs and/or institutions in the first half hour and the last half hour of the day, with no interest from the public all through the middle part of the day, as far as I could tell. It looks like a put-up
suckers rally to me.
Further, we are trying to move the world this time, due to
how late we are acting in a variety of arenas, not just Fed
policy. Foreign policy, military action, foreign aid, trade
agreements, all have been laggard.
After this little bounce where will we be? The Fed needs to
take actual measures, little as it may suit their dignity to
rush so. And then they may find they are pushing on a
string in some of these countries for a while. E.g. Japan,
where the Yen price complicates things short term.
Although I am optimistic long term because of all the reform
movements, these things take a lot of time. You can't start
late like this and expect immediately gratifying results.
Cheers,
Chaz
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