Rates cuts are coming! It's June 25, 2003

[Hein-Verbruggen]

The last fed funds rate cut was lucky #13 on June 25, 2003. That was the last US fed funds cut which ended a two and one half year period of rates cuts post Equity Market collapse. (bubble bursting).

Here we go again, just four years later with a CDO bubble burst illness.

Everyone needs the trauma steroid monetary treatment.

1) Wall Street firms (Bankers/Brokers/Hedge Funds) need it bad
2) mortgage borrowers need it
3) Re-fi folks need it
4) real estate sales demand it
5) auto makers need credit to sell
6) Flat panel DTV makers need credit to sell

Rates did NOT cause the problem---fraud and deceptive selling did, but monetary policy will be the primary reaction/intervention. Like chemo therapy is for all Cancer.

 

[limerickman]

US rates will go down, I agree.
Bernie has no other choice.

European rates will increase and/or remain static.
Inflationary pressure here in euroland is growing and there is no appetite for inflation.
There's even less appetite to bail out the banks.
Bet Bernie would prefer to have these problems, instead of the janitor duties to Mr.Greenspans incontinent financial pants.

Bank of England though is in the cleft stick.
House/mortgage market is beginning to stall - but inflation is a worry.
Mervyn King is undecided.
If he goes either route, he gets flack.

 

[Hein-Verbruggen]

Lim: Never look into the rear view mirror for future course changes and we're all in this global financial mess together. Money center banks know no borders anymore, nor do Swiss or Cayman secrecy rules. The future of residential real estate is a pain cave. Deflation is the next shoe to drop.

Inflation is something to worry about in a full employment wonderland. Going forward, England & Europe will have unemployment issues and deflation.

All central bankers will meet secretly and hold hands. Rate cutting will be measured and uniform, but the direction will be straight downward. Everyone will climb on board. (The USA cannot sell Treasury Bills, Notes & Bonds w/o European support) Wall Street & the US fiscal deficit must and will be rescued. Main street will follow--some of them anyway. This squabble will be resolved before the UCI/ASO food fights.

Just as I predicted the ubiquitous nature of doping in pro cycling, I have now correctly telegraphed the global recession of 2008-2009.

The good news for SUV owners is that the blood-for-oil program will result in lower prices at the pump and heating oil for those trapped in a Winter chill.

 

[limerickman]

Lim: Never look into the rear view mirror for future course changes and we're all in this global financial mess toghether. Money center banks know no borders anymore, nor do Swiss or Cayman secrecy rules.

Hein mate.
Stop spoofing.

I suggested to you yesterday that you need to familiarise yourself with economic policy.
It's patently obvious that either you haven't got a clue - or you're trying to
wing it.

I suggest that you familiarise yourself with Euroland economic indicies before
spouting your usual guff.

Euroland unemployment is at 6.9% - an historical low.
Gross domestic and gross national product in Euroland is growing.
ECB interest rates have been rising since late 2005 and are forecast to continue to rise or remain static until mid-2007, at least.
Inflation however is also rising.

If you took the time to read the statements of the ECB's monetary policy
statements, following their monthly meeting for the past 18 months, instead of posing here, you'd see that inflation is the ECB's primary concern in a resurgent Euroland economy.

Inflation is something to worry about in a full employment wonderland. Going forward, England & Europe will have unemployment issues and deflation.

Hein mate - England/Euroland don't have unemployment issues and deflation.
Stop putting out disinformation here.
Your information is inaccurate.

Read the ECB's monetary policy's statement and read the BoE monetary policy statements.

All central bankers will meet secretly and hold hands.

..............yeah right.

Just as I predicted the ubiquitous nature of doping in pro cycling, I have now correctly telegraphed the global recession of 2008-2009.

You're a fantasist.

Yesterday, you said that all rates were being cut now.
When challenged you then amended your proposition to "(rates) cutting will commence during the next twelve months"
Now you've changed tack to suggest that recession will commence 2008-2009.
The old scatter gun approach.
Hoping that something, somewhere, sticks.

Bit of advice : read the reports of the central banks of England and Euroland.

 

[Hein-Verbruggen]

Your problem is that your are trapped by an acute lack of experience in such matters, and a huge ego. There is so much you do not understand.

I do suffer from that problem as I have a long background steeped in Grand Cayman finances & Edge Act banking matters.

No backtracking by me, the R/E market top was July 5, 2005. The economic metrics will show a recession (negative growth in 2008/2009) Lagging indictators mask the present recession. Many folks are already in free fall NOW.

Monetary stimulous (performance doping) is all that can be managed by central bankers. Much like a WADA, but with a printing press and media megaphone. Trash talking and steroids exemptions.

They have NO regulatory authority in a financial system that risk dumps outside of regulators radar screens (hedge funds, CDOs, Grand Cayman are all exempt) Central Bankers cannot stop fraud on Wall Street or at a mortgage origination or a pump and dump stock scheme, nor can they practice it. But they can add or subtract velocity and trash talk confidence into a marketplace.

Smoke and mirrors AND inflationary stimuli can work--in the short term.

That's where we are---early in a global recession. Central banks will all lower rates because they have NO other political action.

You probably are blissfully unawre that Miami Office of KPMG entered into a plea deal with the US DOJ and agrred to pay a $600 MILLION fine and not take on any new clients for 24 months--for hedge fund leveraged income tax evasion. That is a current case of financial fraud by a Big Eight (3 & 4) CPA firm. Imagine if DOJ & IRS audited each office? New York, Chicago, SF, LA?

Thanks for coming.

 

[limerickman]

Your problem is that your are trapped by an acute lack of experience in such matters, and a huge ego. There is so much you do not understand.

hein mate - you've posted information throughout which is factually and totally incorrect.
It's you who has both no experience and no idea of what you're talking about.

I do suffer from that problem as I have a long background steeped in Grand Cayman finances & Edge Act banking matters.

You suffer from the problem of being completely unaware of the economic indicies - which make your various pronouncements here appear ill informed
and inaccurate.

Grand Cayman finances - have nothing whatsoever got to do with central bank economic policy.

Read the monetary policy statements of the BoE and ECB.

.

They have NO regulatory authority in a financial system that risk dumps outside of regulators radar screens (hedge funds, CDOs, Grand Cayman are all exempt), it cannot stop fraud on Wall Street or at a mortgage origination or a pump and dump stock scheme. But is can add or subtract velocity and trash talk confidence into a marketplace.

Smoke and mirrors AND inflationary stimuli can work--in the short term.

That's where we are---early in a global recession.

Thanks for coming.

You're a fantasist, hein

 

[Hein-Verbruggen]

Too much school mythology, not enough back alley crime fighting.

Maybe an afternoon at GE Capital can help you get it? Or even a morning at a Nike swoosh sneaker store.

Hedge Funds and off-shore banking are essential to financial fraud and evasion.

Always has, always will be. Try injecting Deca w/o a syringe. You can't.

Even the tax-exempt Vatican banks off shore.

 

[limerickman]

Too much school mythology, not enough back alley crime fighting.

Maybe an afternoon at GE Capital can help you get it? Or even a morning at a Nike swoosh sneaker store.

Hedge Funds and off-shore banking are essential to financial fraud and evasion.

Always has, always will be. Try injecting Deca w/o a syringe. You can't.

Even the tax-exempt Vatican banks off shore.

Hein : GE Capital, Nike, Banco Ambrosiano, Grand Cayman............

They've nothing to do with central bank interest rates or monetary policy statements.
Nor do they have anything to do with imaginary deflation and fantasist unemployment.
Or economic recessions.

Why the mendacity, Hein?
Confronted with the facts - you revert to type.

Try to stick with the subject matter.

 

[Hein-Verbruggen]

Lim:

I am puzzled. Do you have any idea who drives the order (buy/sell) trade tickets at all major bank-brokerages and Mother Merrill, JP Morgan, HSBC, Bear Stearn, Tailwind Capital, Goldman Sachs and then through the settlement skim exchanges NYSE, NASD etc....?

I have people at most of these places and the MININUM estimate is 55%. Certainly, greater than half of all trading buiness is performed with hedge fund clients.

Nobody really knows the actual mix---but unregulated 'secrective & private' Hedge Funds drive all capital marketplaces now---that is no great secret.

Interest rate policies DID NOT INVENT cheating/gaming/off-shore leverage.

Your message seems to be cut from 30 year old methods/policies. That Big Banks control the world. They do so today, only via their cozy relationships with their hedge fund partners. It is a now much less than 100% control.

Presenty we have a huge financial crisis. The Big Banks lent money to the hedge funds--many of whom are now having to unwind CDOs & Treasuries to feed the redemption window calls. The big banks have a strained relationship with their evil creations. All of this with a blood-for-oil petro-based economy.

It was working so very well until the CDO underwriting problem reared up.

That's why any solution will involve off-shore accounts, secrecy, secret hedge fund agreements and very little to no oversight.

 

[limerickman]

I am puzzled. Do you have any idea who drives the order (buy/sell) trade tickets at all major bank-brokerages and Mother Merrill, JP Morgan, HSBC, Bear Stearn, Tailwind Capital, Goldman Sachs and then through the settlement skim exchanges NYSE, NASD etc....?

None of which has any bearing on interest rate policy as set by the various central banks, Hein.

Goldman Sachs, Bear Stearn : they've no input to the setting of interest rates
by the ECB, Fed, BoE.

Interest rate policies DID NOT INVENT cheating/gaming/off-shore leverage.

I never suggested that interest rate policies did invent cheating etc.

I suggested that low interest rates were the catalyst - the first step in the supply chain if you will - promoting reckless lending to people who were never in a position to repay those loans.
And the security for those loans was offset by using instruments such as CDO's being transacted in the financial markets.

CDO's nominal value is predicated upon the loan being repaid.
If interest rates were had been kept at a realistic level - cheap credit/dodgy loans would not have been widespread and loans/CDO's would never have been issued.

Your message seems to be cut from 30 year old methods/policies. That Big Banks control the world. They do so today, only via their cozy relationships with their hedge fund partners. It is a now much less than 100% control.

Presenty we have a huge financial crisis. The Big Banks lent money to the hedge funds--many of whom are now having to unwind CDOs & Treasuries to feed the redemption window calls. The big banks have a strained relationship with their evil creations. All of this with a blood-for-oil petro-based economy.

It was working so very well until the CDO underwriting problem reared up.

That's why any solution will involve off-shore accounts, secrecy, secret hedge fund agreements and very little to no oversight.

Yes, the hedge funds do have a problem.
And yes, the banking system has a problem because banks are not prepared to loan money to other banks - because visibility as to the extent of who's holding what worthless paper is opaque to say the least.

But let's be clear : interest rates policy in Euroland and Britain is set in the context of inflation these days.
At the time of writing, Europe and britain have set their interest rate policy on the basis that the respective economies are performing well and that the only real threat to these economies is inflation.

You appear to have a fundamental misunderstanding, hein.
If what is going on in the financial markets was of concern either in Euroland or britain - the BoE wouldn't have increased the inter-bank rate for liquidity
given to banks who are struggling, above the general interest rate.
Mervyn King would have dropped the overall interest rate.
The ECB would have dropped it's rate as well.
Neither institution did and all indications show that the recent round of interest rate policy (increases/static) will continue.

The US on the other hand has a different set of problems : to sustain it's economic performance requires the Fed to drop rates to hold off what many consider to be a real threat of recesssion.
That's why the Fed dropped it's rate a few days ago.

 

[Crankyfeet]

Heiny-Ferbuggerin....

Equity markets going up despite blood already on Wall and Main Street. Go figure?? Please keep up unsolicited bearish prognostications. Together with nervousness on the street and market resilience....a great buy-indicator for those with enough experience to notice it.

What , your recession now out to 2008-2009. Mmmm.... Remember book "The Great Depression of 1990". Sold alot of copies. Easy to sell gloom amd doom talk. Its everybody's fear and everyone wants to be warned about it before its happening.

And me thinks the year 2000 top in the US equities makets (principally the technology stuffed NASDAQ which is still about 50% below its high in that year) may have had something to do with the domino collapse of the smoke and mirrors internet boom. Which oddly lends some model creedence to your "It ain't over yet" call.

I'm still keepin' an eye on the real estate sector to see if this thing's going to play out regional or national.

And by the way, as Lim has pointed out, the days of the US market sneezin' and the world catches a cold my friend are over. The US economy will still be strong but it is in decline compared/relative to the rest of the world's markets.

 

[Hein-Verbruggen]

Stay tuned. The mark to market pricing of credit paper will be a big surprise for Q3, September 30, 2008. Risk dumping is NOT good for transparency nor confidence. More brutal unwinding over the next year and years.

We have a Global Market put, a margin call on the world credit markets.

Whatever USA economy does---the world will follow. USA gets the flu, Europe goes into coma. We won WWII and rule Wall Street. The USA comsumes most of all foreign wares. Nobody does anything without the USA blood-for-Oil-wars, credit consumption or CDO spinning.

Rates will fall. No doubt whatsoever.

1) Discount rate will be dropped into alignment with fed finds rate.
2) Both rates will be slashed over the coming year
3) 2008 recession will moderated as a resut of central bank policies in all countries, Wall Street & main street will get busy again.
4) low rates provide the steroid & trauma care needed to counter the fraud.
5) real estate valuation will decline, excess inventory and no more Liar Loans
6) enjoy your dreams of independence Cranky

Heiny-Ferbuggerin....

Equity markets going up despite blood already on Wall and Main Street. Go figure?? Please keep up unsolicited bearish prognostications. Together with nervousness on the street and market resilience....a great buy-indicator for those with enough experience to notice it.

What , your recession now out to 2008-2009. Mmmm.... Remember book "The Great Depression of 1990". Sold alot of copies. Easy to sell gloom amd doom talk. Its everybody's fear and everyone wants to be warned about it before its happening.

And me thinks the year 2000 top in the US equities makets (principally the technology stuffed NASDAQ which is still about 50% below its high in that year) may have had something to do with the domino collapse of the smoke and mirrors internet boom. Which oddly lends some model creedence to your "It ain't over yet" call.

I'm still keepin' an eye on the real estate sector to see if this thing's going to play out regional or national.

And by the way, as Lim has pointed out, the days of the US market sneezin' and the world catches a cold my friend are over. The US economy will still be strong but it is in decline compared/relative to the rest of the world's markets.

 

[Crankyfeet]

Stay tuned. The mark to market pricing of credit paper will be a big surprise for Q3, September 30, 2008. Risk dumping is NOT good for transparency nor confidence. More brutal unwinding over the next year and years.

Suspect you mean 2007. "Brutal Unwinding" OOOHHH! 24/7 sage makes me scared.

We have a Global Market put, a margin call on the world credit markets.

WTF are you talking about?? If you mean a Global Market put option, what global market put are you referring to. Since every man and his dog has bought puts in the last two months, I suspect you're going to have to get in line with the rest of the crowd to claim your "margin call". Whose "We"?

Whatever USA economy does---the world will follow. USA gets the flu, Europe goes into coma. We won WWII and rule Wall Street. The USA comsumes most of all foreign wares. Nobody does anything without the USA blood-for-Oil-wars, credit consumption or CDO spinning.

Yeah maybe back in the 70's. Funny thing US once produced most foreign wares , now they just import and consume them. You checked the respective import/export trading and financial deal volumes in the rest of the world lately? Me thinks you may be surprised. And as for Europe following lock step with the Fed on interest rate moves - you have no idea what you're talking about.

Rates will fall. No doubt whatsoever.

1) Discount rate will be dropped into alignment with fed finds rate.
2) Both rates will be slashed over the coming year
3) 2008 recession will moderated as a resut of central bank policies in all countries, Wall Street & main street will get busy again.
4) low rates provide the steroid & trauma care needed to counter the fraud.
5) real estate valuation will decline, excess inventory and no more Liar Loans
6) enjoy your dreams of independence Cranky

1) Thanks for that pearl of wisdom Heiny - the Discount rate and Fed Funds rate are like 98% correlated. And so what if the Discount Rate comes down near the Fed Funds Rate. Banks wouldn't go to the Federal Reserve if the spread was too high.

2) Only if signs of stagflation or deflation across all areas of the economy start occurring (not just property). Only if there is a massive slowdown in the economy. Since the stock and bond markets have been leading indicators of every recession since Adam, we'll need to see a little more market hiccupping before the media doomsday hype equates with what the markets are saying.


3)So we've gone from a "Global Meltdown of historic proportions not seen since 1980" a week ago to now your predicting a moderated recession, with Wall and Main Streets getting busy again, due to those bastards at the Fed who are steroiding the problem with money.

Don't sound so dissappointed that you won't get to see your financial armageddon Heiny. Your personal neuroses are hard to hide from discerning observers. But then you could always change your username again if you're not happy with what's on record.

4) Interest rate manipulation (more limited in power than most people would believe) is the Fed's only real way of dampening the effects of sudden jolts upward or downward in the economy.

5)That's the real risk here, as previously stated IMO. But the more I hear your rambling, the more I want to be long stocks and property (though added property exposure can wait).

6) No dreaming Heiny, I'll leave that to you. Financial independence is current though nothing is guaranteed.

 

[Hein-Verbruggen]

ECB is today signaling a rate reduction. (by foregoing the 4.0 to 4.25 adjustment) Their next move will be downward.

As I predicted last week.

Your delusion is my validation.

Much like all Jan Ulrich fans.

 

[Crankyfeet]

ECB is today signaling a rate reduction. (by foregoing the 4.0 to 4.25 adjustment) Their next move will be downward.

As I predicted last week.

Your delusion is my validation.

Much like all Jan Ulrich fans.

Mmm....Rates not going down = Rates going down. Is that sage math?? Heiny, the Govt. rate manipulators are going to lag the market, not lead it. You are still spouting headlines from weeks ago printed on every newspaper business page in the world who cares about the US market. You may think you sound really knowledgeable to the average guy here who's more interested in saving for a new bike than what is happening in world financial markets but anyone with any experience can spot YOU as the FRAUD.

Ironically, one sage whom I respect, the Sage of Omaha, Warren Buffett, never once in his 60 years of market success ever concerned himself with macroeconomics or what the daily market news was spewing out at any given moment. And he was long the market through nearly every recession that I am aware of save cashing up a fair amount in 1973.

So is it a Global Meltdown of Historic Proportions or a moderate recession with everyone on the Street getting busy again next year. Which is it? Seems to me you've softened a bit in the space of four days.

 

[Hein-Verbruggen]

It is what it is, GRIM. Put whatever spin on it you must, just like denying doping in TV-based sport or your personal favorite doper.

The EKG for global credit markets is sick. ICU trauma ill. Life support must be applied. The present pulse rate is that of a gravely ill patient.

Here is the EKG reads (annual yield quotes) for last August 2007 on the 90 day T-Bill, the safest known investment on the planet earth.

August 8, 2007 4.95%
August 20, 2007 3.07%
August 27, 2007 4.58% (discount rate cut and CDOs offerred for collateral)
August 30, 2007 3.80% (more fed guidance demanded)
September 5, 2007 4.47% (Euro bank trouble noted, ECB will react)

These historic wild variations on such a stable investment prove that institutional investors (big banks, brokers, hedge funds, pensions) have NO CLUE whatsoever as to what is safe in the marketplace. They lack confidence and are waiting for yet more steroids from central bankers or they will revent back into panic mode.

You were told. Look for ECB to get on board soon with the fed and lower rates. As the USA economy goes--all others must follow.

 

[Crankyfeet]

Heiny-whiney...yes there has been some massive inflows into T-bills. remember, these are 90 day bills with annualized yields. The 90 day yield differences (in absolute yields over 90 days) are about a quarter of the ones' you quote. The 90 day T-bill is about the closest thing you can get to stuffing cash in a mattress for skittish fund managers. The yield spikes have all been downward, meaning that money has been going in here without much concern for short term returns. Heiny, when you see a lot of panic, that is a bullish sign. When you see problems in the market place which the whole world has observed (as in this case), and no one seems to see much risk (as NOT in this case)....that is when one should be nervous. However sometimes the crowd is right. The more examples of media and public panic I witness though, the less concerned I am.

The worrying scenario for the Fed would be deflation in the property sector and inflation in every other commodity. Little room to manoevre on interest rates then.

It is what it is, GRIM. Put whatever spin on it you must, just like denying doping in TV-based sport or your personal favorite doper.

The EKG for global credit markets is sick. ICU trauma ill. Life support must be applied. The present pulse rate is that of a gravely ill patient.

Here is the EKG reads (annual yield quotes) for last August 2007 on the 90 day T-Bill, the safest known investment on the planet earth.

August 8, 2007 4.95%
August 20, 2007 3.07%
August 27, 2007 4.58% (discount rate cut and CDOs offerred for collateral)
August 30, 2007 3.80% (more fed guidance demanded)
September 5, 2007 4.47% (Euro bank trouble noted, ECB will react)

These historic wild variations on such a stable investment prove that institutional investors (big banks, brokers, hedge funds, pensions) have NO CLUE whatsoever as to what is safe in the marketplace. They lack confidence and are waiting for yet more steroids from central bankers or they will revent back into panic mode.

You were told. Look for ECB to get on board soon with the fed and lower rates. As the USA economy goes--all others must follow.

 

[Hein-Verbruggen]

You are on uncharted waters Cranky w/o a life raft. Not bullish for most sectors. T-Bills have been whipped up and down as steroid tactics entered the system last month. (not stable, not a clean sustainable EKG reading)

I will look for you from my money supplier helicopter.

 

[Crankyfeet]

You miss the point. Economic bearishness has nothing to do with where the market is going. Do you think it looked bearish on October 22nd, 1987 (just after the crash). Or how about October 1990, just prior to invading Iraq. Of course it did. But this was the bottom in the markets. I am not saying this is the bottom (short-term correction) as I am still monitoring other domino indicators. And in any case I don't have the ignorant ego to proclaim "I know" what's going to happen. I am saying that a bleak economic outlook is not bearish in itself. That's what you get near the bottom of a downward move. I am just weighing the odds. Nothing is guaranteed.

Maybe we are talking about different things. I am talking about financial asset exposure. If you have real assets such as expensive real estate with heavy gearing in California, that's a different story.

I don't like your MO of big-talking predictions based on little other than media-hyped paranoi and limited knowledge. If I see you trying to grandstand fraudulently I am going to try to expose you. I don't know much about doping practices but if you want to act like you are some kind of Financial Market Guru, and I sniff you as a fraud, I'm going to take aim.

You are on uncharted waters Cranky w/o a life raft. Not bullish for most sectors. T-Bills have been whipped up and down as steroid tactics entered the system last month. (not stable, not a clean sustainable EKG reading)

I will look for you from my money supplier helicopter.

 

[Hein-Verbruggen]

Not so Cranky. Forest fires cause property damage. Evacuate or you may suffer a harsh BBQ. Heavy rains may cause floods too. Get a raft.

Ignorance and denial are unhelpful (as in doping crimes too), action and awareness may save lives.

The credit markets are in paralysis mode. Until ECB and US fed offer up more steroids, IV feeds, free money gifts and lower interest rates--real estate values will continue to tank, sales will decline to zilch, unemployment will grow, and stagnation & recession would then follow. (already happening)

Ignore the past 30-day T-Bill yield spread EKG at your own peril.

Today's news (lagging indicator) is that 1% of all USA mortgages are now in forclosure---a new historical record.

In addition, 5% of all US mortgages are presently delinquent (pmts past due), also a new hostrical record. These are NOT BULLISH economic indictors.

T-Bill yields are in a wild EKG fluctuation, revealing a gravely ill patient.

Often times---the obvious clues are a warning. recession is near the longer the central bankers dilly dally with the inescapable rate reductions. They WILL lower rates, but sooner is better than later.

ECB will LOWER rates too. All the world benefits from the mighty USA consumption, credit driven machine, blood-for-oil, and financial hedge fund black boxes of private equity capital. All world economies shadow the USA, Asia included.

Petro dollars = solient green

You miss the point. Economic bearishness has nothing to do with where the market is going. Do you think it looked bearish on October 22nd, 1987 (just after the crash). Or how about October 1990, just prior to invading Iraq. Of course it did. But this was the bottom in the markets. I am not saying this is the bottom (short-term correction) as I am still monitoring other domino indicators. And in any case I don't have the ignorant ego to proclaim "I know" what's going to happen. I am saying that a bleak economic outlook is not bearish in itself. That's what you get near the bottom of a downward move. I am just weighing the odds. Nothing is guaranteed.

Maybe we are talking about different things. I am talking about financial asset exposure. If you have real assets such as expensive real estate with heavy gearing in California, that's a different story.

I don't like your MO of big-talking predictions based on little other than media-hyped paranoi and limited knowledge. If I see you trying to grandstand fraudulently I am going to try to expose you. I don't know much about doping practices but if you want to act like you are some kind of Financial Market Guru, and I sniff you as a fraud, I'm going to take aim.