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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: tonka552000 who wrote (4467)	8/13/2002 11:32:27 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Tuesday, August 13, 2002 Market WrapUp, Puplava (Middleton) Surprise? Not hardly. Central bankers left the benchmark overnight bank rate at a 41-year low of 1.75 percent and indicated the economy’s recovery from recession is less assured than just a few months ago. They went on to add that weakness, not inflation, is the biggest economic threat -- leaving the door open to cut interest rates in the near future. With all of the hype surrounding today meeting, there wasn’t much room for the fed to do anything but stand pat, in my opinion. It seems that in the past, as far as the market goes, the fed would get the most out of a rate change when it was done as a surprise versus at a scheduled meeting. If you consider that along with the fact that it was only six weeks ago that Mr. Greenspan, before Congress, stated that strength in the economy pointed toward recovery, taking no action was the only course of action for the fed at this time. What I found extremely interesting during the events of the past week is the way the big banks and brokerage houses suckered the individual investor into a non-existent rally, once again. The call by economists at these firms to lower interest rates were no more than self serving and at the cost of the individual investors. Brokers know investors are still out there looking for the bottom of this market so they can put their money market funds to work right as the market rebounds. Folks, let me tell you something, IT IS NOT GOING TO BE THAT EASY and most brokers out there do not know when that bottom will be. Now the near term for investors becomes even more treacherous as the fed has left the door open for a surprise rate cut. Thoughts of making money by shorting the market carry much larger risks. Getting caught short when the fed announces a rate cut could be expensive. Financial Markets Today’s market acted as one could predict as it opened and traded for most of the session, flat. Once the fed released its decision, the market free fell to its close. The S&P 500 fell 19.59, or 2.2 percent, to 884.21. The Dow Jones Industrial Average slumped 206.43, or 2.4 percent, to 8482.46. The Nasdaq Composite Index shed 37.52, or 2.9 percent, to 1269.32. Two stocks fell for every one that rose on the New York Stock Exchange and the Nasdaq Stock Market. Some 1.28 billion shares traded on the Big Board, 19 percent below the three-month daily average. Treasury Markets The 10-year Treasury note rallied 1 3/32 to yield 4.08 percent while the 30-year government bond put on 1 17/32 to yield 4.975 percent.