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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: ldo79 who wrote (367025)	4/29/2008 5:15:05 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 436258

The Fed meeting... To all; we have a Fed meeting today and tomorrow, we will get the spin results tomorrow afternoon. As I've written many times before, the Fed is basically powerless to reverse what has been set in motion. Common wisdom today is that the Fed may or may not cut rates, and will deliver the message that they are on hold. On hold because the recession that was never predicted, is now close to an end. On hold because the "strong" dollar has bottomed, and bounced a whopping 2 percent off its lows. On hold because the housing market that has and is collapsing based on all recent past and present data, will bottom and turn up. On hold because the banking system which needed one, no make that two or three cash infusions will need no more. On hold because blah, blah, blah. This is a systemic implosion that is being put off as long as it can in the hopes that a new "magic cure" can be found before the foundation of the banking system explodes. Actually this is not correct. The foundation exploded last fall, we just haven't been privileged or allowed to see any fallout, except in the form of single family house foreclosures. It's like a tree falling in the woods, if no one is around, the spinmeisters can propose it made no sound when it fell. For that matter, in todays world we would be told that it never fell. The central banks, politicians, bankers, on down to the common man can say, spin, believe whatever. This whole thing was born, grown, abused etc. on the back of the real estate market. If the Fed can't get mortgage rates lower, and more credit available for real estate, there is no hope of a turn. The Titanic has been set in motion and already struck the iceberg, foreclosures are beginning to rise exponentially. The common man knows that real estate is falling and will not step in front of the runaway freight-train to the downside. Real estate is what matters now, not the Dow Jones. Real Estate is at the core with all the debt and leverage attached to it. The entire worldwide banking system depends on the real estate markets. Credit is scarce and getting scarcer, rates are rising, appraisals are dropping. The banking system has now in little over 9 months reported a loss of a third to half of their capital. In reality, all the capital that has been built up by banks for over 100 years is now gone. This, as I've written about many times before is about solvency, not liquidity. Regards, Bill H. from gata