Stitch, you outlined all the reasons why I think that the FED's will not relax this week.
Banks are probably working overtime reviewing their lending portofolios and right now are not in the process of identifying new customers to lend out to, but debtors to take off their books. Actual interest rates are lower then the FED rates and lowering by the FED's, per se, would not change that picture.
If they did lower the rate (yielding to the political pressures), the market will have a mild rally on Tuesday and Wednesday (Wed is Yom Kippur, counter trends often prevail). By Thursday, I think that the wobble will already start and by the first full week of October, we may have the beginning of the minimelt in progress. If they do not lower the rates, we may start going down slightly earlier, IMHO.
Zeev |
