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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (362274)	12/11/2007 4:39:23 PM
From: tejek	Respond to of 1595061

The markets seem to be saying that 1/4 point (and more?) had already been priced in and were disappointed. It's really hard to figure what's going on with all the manipulation attempts by the various parties. I think the markets are worried about a recession. They believe the Feds are an important element in mitigating the effects of a recession by improving liquidity. To accomplish that, the markets believed the feds had to cut the discount rate by 50 basis points. When the Feds cut by only a 1/4 point for both the discount and fed rates, I think the markets saw the Feds as out of touch and that worries them. Hence, the sell off. In the somewhat distant past [pre 2002], when the markets were worried about recession and sold off, gold was seen as a place of safety to put one's cash. So as markets sold off, the price of gold would go up. However, that seems to have changed post 2002. Now, Gold trades more like a commodity if not a stock share, and goes down when the rest of the markets go down. That's why I question whether I should put some of my money in gold.