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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (7020)	11/11/2007 2:44:16 PM
From: Kpain	Read Replies (3) \| Respond to of 50281

Jim, Thanks for the web site. I think (speculate) that the fed will pump in as much liquidity as possible to keep this rickety boat afloat. Eventually logic dictates that the "raw material" of debt will only go so far and we will see a big downturn. I, like others, wonder "when." How powerful is the fed and when will it's ability to increase the money supply not be enough? I think they will go down fighting hard. So where is the best place to park our money?? Reading the recommended site by dvdw regarding Patrick Byrne makes me wonder if anyone can be trusted. I think I'll hunker down with a bunch of gold and silver coins and wait for this mess to play out. Scary. This story ran about a week ago. By Jeannine Aversa, AP Economics Writer WASHINGTON — The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, one of its largest cash infusions to help companies get through a credit crunch that took a turn for the worse in August. The action comes one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a target for a key interest rate for the second time in six weeks to protect the economy from the ill effects of collapse in the housing market, aggravated by the credit troubles. The Fed on Wednesday ordered the federal funds rate to be lowered by one-quarter percentage point to 4.50%. That followed up on a bolder, half-percentage point cut in September. Those two rate reductions might be sufficient to help the economy make its way safely through trouble spots, Fed policymakers indicated. The funds rate affects many other interest rates charged to millions of individuals and businesses and is the Fed's most potent tool for influencing economic activity. The Federal Reserve Bank of New York, which carries out the central bank's open market operations, moved Thursday to inject $41 billion in temporary reserves into the U.S financial system. It was an action designed to ensure that the markets — which have suffered through a period of turbulence over the last few months — functions smoothly. The cash infusion came in three separate operations. FIND MORE STORIES IN: Wednesday \| Thursday \| United States \| Fed \| August \| US Federal Reserve System \| Ben Bernanke \| Federal Reserve Bank Fed policymakers at their meeting on Wednesday noted that the "strains from financial markets have eased somewhat on balance." Still many Fed officials in the last week have described the state of financial markets as fragile. Bernanke and other Fed officials have said it will take time for the markets to fully recover from the credit crisis. Since August, the Fed has been pumping cash into the financial system to help ease strains from the credit crunch. It also has cut its lending rate to banks — a third such cut came on Wednesday. The Fed also has ordered two reductions to its most important interest rate, the funds rate, to help the situation. Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

To: jim_p who wrote (7020)	11/12/2007 2:08:07 PM
From: jim_p	Read Replies (1) \| Respond to of 50281

The current sell off is due in part to hedge fund redemptions resulting from the poor performance in 3Q. What we are seeing this week is a lot of unwinding of the carry trade as the leveraged hedge funds sell off investments to raise cash for redemptions that are due this week. As a result we are seeing oil, gold, USD and the common stocks with the most gains being sold off. Q4 redemptions should be a lot worse given the even worse performance so far this Q along with foreign investors getting hit with both the poor returns and the lower dollar. Buying will lead to more buying until the music stops and selling will lead to more selling as investors all scramble for the last chair. We're now in the selling leading to more selling mode which will lead to even worse hedge fund performance, which will lead to even more selling in Q4 etc etc etc. This is no time to be bargain hunting, we're in the short the rallies mode and my guess is this will last for at least the next three months. The bears currently have the perfect storm going for them with the credit crunch, spiking oil prices and hedge fund redemptions which will only lead to more hedge fund redemptions next Q. Stay short and prosper. JMHO, Jim