Fed Desperation grows - markets to tumble
Didn't the S&P just say that the worst was behind us? LOL
Bear Sterns technically went bankrupt Friday, surviving on a $30B Fed purchase of toxic loans and a nominal buyout by JP Morgan (so long 15,000 BS employees).
That makes $330B so far that the Fed has dumped into the marketplace. To lower the carrying costs, they also conveniently lowered the borrowing rates - again.
The message is simple: the Fed is abandoning the dollar in favor of saving banks, whatver the cost (including inflation). This is causing massive panic overseas in countries that export to the US. The yen is now 96 yen to the dollar - a 15% drop in 3 weeks. The Dollar/Euro as of Friday was down 10%, probably will be even more Monday.
This will also lead to massive, heart-rending inflation and margin hits to every company importing fuel and products.
The Fed's efforts to date are not accomplishing much. A major investment bank just went belly up weeks after $200B was made available. What the Fed has accomplished is massive dollar weakness, loss of faith in the dollar, guaranteed double-digit inflation, and global recession. The Fed clearly has no gameplan and is just winging it. Yikes.
This is leading to panic. Lots of dollar dumping and Central Bank intervention, but the result is the same: a weak dollar.
I expect our SRS shares to vault on this - everyone will bail on banks now.
Gonna be a rocky week ahead. Especially with options expiration - no such thing as a short squeeze this week.
Bear Sterns technically went bankrupt Friday, surviving on a $30B Fed purchase of toxic loans and a nominal buyout by JP Morgan (so long 15,000 BS employees).
That makes $330B so far that the Fed has dumped into the marketplace. To lower the carrying costs, they also conveniently lowered the borrowing rates - again.
The message is simple: the Fed is abandoning the dollar in favor of saving banks, whatver the cost (including inflation). This is causing massive panic overseas in countries that export to the US. The yen is now 96 yen to the dollar - a 15% drop in 3 weeks. The Dollar/Euro as of Friday was down 10%, probably will be even more Monday.
This will also lead to massive, heart-rending inflation and margin hits to every company importing fuel and products.
The Fed's efforts to date are not accomplishing much. A major investment bank just went belly up weeks after $200B was made available. What the Fed has accomplished is massive dollar weakness, loss of faith in the dollar, guaranteed double-digit inflation, and global recession. The Fed clearly has no gameplan and is just winging it. Yikes.
This is leading to panic. Lots of dollar dumping and Central Bank intervention, but the result is the same: a weak dollar.
I expect our SRS shares to vault on this - everyone will bail on banks now.
Gonna be a rocky week ahead. Especially with options expiration - no such thing as a short squeeze this week.
posted by Andrew at
8:42 PM
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