Market looks for more Fed cuts but in reality there may not be any rate movements in the next six to nine months
Sam Adelton
Oct. 19, 2007

Federal Reserve is concerned about the housing slump and the growing perception that commercial real estate is in trouble too. The car sales are down remarkably; the job market is slowly worsening.

The Eurodollar futures market is 80% sanguine that Federal Open Market Committee would ease its 4.75 percent overnight borrowing rate to 4.50 per cent when it met at the end of this month. But in reality the market can very well be wrong.

Fed traditionally have not cut rates when oil and gold made new highs in a year simultaneously. They understand the credit risks and possible meltdown of the financial system. The plan to ’firefight’ situations instead of giving a blank check to all by lower rates again.

They will induce liquidity instead of lowering rates. When that will fail and they will realize that it failed, they will lower the rates. That will happen probably in June-July of 2008.

Dow Jones Industrial Average racing towards 11,000 – credit, mortgage, real estate and merger bubble bursts all working together against it
Sam Adelton
The fundamentals are weak and the sentiment is weak. The mega bear markets care little about sentiment. The Wachovia and Caterpillar news just confirms that the economy is going on a recession and the financial meltdown is happening slowly but steadily.
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10% drop in net at Wachovia for mortgage troubles confirm the financial meltdown and banking troubles ahead
Peter Oberois
The earnings fell to $105 million from $533 million a year earlier. The slowdown is significant and confirms the slow and steady meltdown in the banking sector.
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With new injection of funds Citigroup SIVs can avoid the kind of forced selling at distressed prices – but how long as the banking and financial meltdown continues?
Tarin Mugabe
With new injection of funds Citigroup SIVs can avoid the kind of forced selling at distressed prices. They have managed to find funds that will keep them safe for now.
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G7 sets the tone for the markets - EU and US divided on dollar but united on higher Yuan – a coordinated action may force China to comply
Karen Zuba
U.S. Treasury Secretary Henry Paulson and French Finance Minister Christine Lagarde disagreed on the level where US Dollar and Euro should trade. But they were united about where the Yuan should trade compared to Dollar and Euro.
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Bush may open strategic reserve for oil price to calm down – what happens to crude oil futures then?
Anita Zuker
There is more than even chance that Bush Administration may soon open the US strategic reserve to cool down the price and punish the speculators. If that happens the crude oil can drop 30% in price in the span of a few days.
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Market looks for more Fed cuts but in reality there may not be any rate movements in the next six to nine months
Sam Adelton
Fed traditionally have not cut rates when oil and gold made new highs in a year simultaneously. They understand the credit risks and possible meltdown of the financial system.
READ MORE>>

Rising crude oil topping $90 a barrel starts dragging world economies into recession – emerging Asian economies subsidizing fuel price bleeding refinery profits
Fred Day
Crude has jumped 48 percent this year, reaching a record $90.23 a barrel in New York today. The rise is exponential and the uncharted territory does not have resistance in the chart.
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