I cannot believe the Fed release a statement one week ago saying "we are not here to bail people out of decisions they make in regards to investing". That was not verbatim, but close. THEN, yesterday just because the markets were getting hammered the Fed drops the rate and bails out investors. As a broker you think I would be glad, but I am sick about it. YOU CANNOT INTERFERE WITH FREE ENTERPRISE and not have a repercussion. I am only 48 but I started investing in the markets when I was 11 years old and "back in the day" investors understood that you were not "guarenteed" shit. Risk was consumerate with reward. Now investors think if they do not achieve double digit returns every year they are somehow victims. There is no economic law that says just because a company is making loads of money the stock has to respond upwards just as there is no law that because a company is losing money that the price has to go down. That is why you look at P/E ratio's, return on equity etc. is to make judgements about markets and to even think about a guarentee is (or should be) ludicrous).
My advice--please understand the Fed is not obligated to bail out the markets with rate cuts or liquidity and the fact that a generation of investors puts money into equity markets with this idea is a recipe for disaster. Do not get me wrong, I am an optimist is why I am in this biz but holy shit batman this is retarted on a stick! THE FACT that the Fed had to drop rate 3/4 % to prop up a market is a bad, bad omen. Rates can only go to zero so you only have this option so many times. The first time it does not work, look out below because the false "long investment" in the markets will unload like a dam bursting. Look for the 1,000 point hammer and slam on the Dow Jones when this happens. If the Fed had any backbone this little market "correction" would have played itself out in a week or two. NOW, the timeframe is out the window. So, take advantage of this "gift" ad reevaluate your investments and use this rally to lighten up unless you are ready to ride the coaster in a long term downtrend. I am only middle aged but even I remember when many many stocks were so undervalued you could not make a chioce between them. Like shooting ducks at a county fair. HOWEVER, even then the markets were stagnent for many years. Just be careful and if you need advice send me private message and I will help you any way I can.

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"oops there goes sanity, oops there goes gravity"

http://www.youtube.com/watch?v=kwhUjFoHwS4

Cottonbroker-formerly known as "the Artist"

I forgot to mention that Tuesdays 3/4% "bailout" and todays rally was largely caused by smart money having to buy back and cover their "short" positions to cover ass because of this shortsighted move by the fed. Even without the fed's 3/4% bailout the markets likely would have had a "kneejerk" rally today or Thursday as the markets had became quite oversold short term. Late this week or early next week the markets likely will "flatten out" and not really go anywhere for a while. Just sharing this....if you do not understand what "shorts" are the effect they have on the markets you probably have no business in the markets unless you just like to gamble. Which is fine..as long as you realize you are just gambling. While you are at it, walk up to the Roulette wheel and put a few thousand on black or red. Same odds bcause the markets can only go two ways.

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"oops there goes sanity, oops there goes gravity"

http://www.youtube.com/watch?v=kwhUjFoHwS4

Cottonbroker-formerly known as "the Artist"

The US has lost a lot of money in depreciation and needs free or rather; cheaper capital to off-set the losses, ride out the storm and make some money back so they can pay off those debts and obligations.

What's wrong with the Fed decision?

I doubt you're cut-throat enough to have been a Broker in the times before regulatory institutions such as the FED and SEC.

Back in those days there was real trading and real scamming going on...ruining the country. We should be so thankful.

The FED is not a regulatory institution. They are a Central Bank.


Federal Reserve System - Wikipedia, the free encyclopedia


Geez, this is simple folks. Monetary Policy should never coincide with market activity. That is what drives hyperinflation. Get a book or two on the Federal Reserve and come back later.

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"It is the Right of the People to alter or abolish the Government"
Declaration of Independence
"Never trouble another for what you can do for yourself."
Thomas Jefferson
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."
Milton Friedman

You are truly clueless....The Fed is responsible for every economic bust and boom since it's inception..where the in fuck do you get this bullshit from?....goddamn your ignorant.

http://www.arguewitheveryone.com/eco...y-s-flaws.html

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"People have so manipulated the concept of freedom, that it finally boils down to the right of the stronger and richer to take from the weaker and poorer whatever they have left."

Yes, the Fed, as have the other central banks, replaced the finding, and not finding, of gold and silver as engine of boom, and bust. However, Jimmy Carter's appointment of Volcker proved Milton Friedman correct in his theory that steady growth in the money supply would lead to a stable economy with minor business cycles.

If you think that eliminating the central bank and switching to commodities to serve as currency would eliminate business cycles, inflation, and deflation, you clearly chose to ignore history.

The worst economic calamity in the nation's history occurred as a result of the Fed taking the point of view that it wasn't going to reward speculators and bail them out, and that the correct response to the speculative bubble was to restore interest rates to their correct value of 3%, and they were intent on doing that even if it meant violating their prime directive, preventing bank failures by being the lender of last resort.

But perhaps you want the banks to fail, the government to take over the banks as was done with the savings and loans which faced and were subjected to the same liquidity crisis that is faced by and threatening the commercial banks.

And what is interesting is how many people who have all the MBA, and phds in economics, and all the law degrees in contract law, and all the econometrics degrees and Nobel prizes in economics, thought that the derivatives, the SIVs, the xxxs and yyys, and all the other weird things that the investment risk rating agencies just admitted that they can't assess the risk for, are pointing fingers at everyone else, saying they should take the hit for their bad investments.

Yet, the people who made no money in the deal, the workers, the people who own their homes and don't have a big mortgage, that have been conservative in their investments and their personal finance, are the ones taking the hit from the actions of the people who reaped billions in performance bonuses for their clever financial transactions.

Who is going to compensate the people who totally own their home who now live in a neighborhood with boarded up houses on all sides of them, who now see their property taxes increase as their town struggles with the costs of all the vacancies and the crime wave of people coming into strip the vacant houses?

Or what of the people who lose their jobs because their employer needs to cut their expenses as they recover from their losses from investing their cash in hedge funds that had large positions in their derivatives that can't be sold?

They are a regulatory institution I'm not even going to argue this with an idiot like you....

There is only one outcome in this struggle. We either walk over their body or they walk over ours!

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"I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be." Thomas Jefferson

"The conservative movement has been hijacked and turned into a globalist, interventionist, open borders ideology, which is not the conservative movement I grew up with." Pat Buchanan

"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government"
Thomas Jefferson

"They are a regulatory institution" please.................they are a room of men .................................................w hom govern the lives..................of.................all..... ........................................they whom hold no allegiance to no man flag or country........................................... .................................................. ..they hold in their hands the very lives that befall them......................................the old monarchs of today...................that keep................what they believe is theirs.........................and print.................and loan..................................and charge..............................the very thing they hold as holly..............................
at no risk to them.................

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"I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be." Thomas Jefferson

"The conservative movement has been hijacked and turned into a globalist, interventionist, open borders ideology, which is not the conservative movement I grew up with." Pat Buchanan

"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government"
Thomas Jefferson

Show me what the Federal Reserve Regulates. last I checked any entity that has no limits can not regulate anything.

__________________
"It is the Right of the People to alter or abolish the Government"
Declaration of Independence
"Never trouble another for what you can do for yourself."
Thomas Jefferson
"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."
Milton Friedman