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Reply #27: Today's WrapUp by Mike Hartman (Fed news) [View All]

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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Feb-03-05 08:20 AM
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27. Today's WrapUp by Mike Hartman (Fed news)
Markets on Hold for Fed Announcement

Observing the markets today has been akin to watching water slowly come to a boil or spending the afternoon watching grass grow. Market participants are sitting on their hands as we await the interest rate decision and accompanying policy statement from the Federal Reserve, and later tonight we get the State of the Union address from President Bush. Markets are calmly expecting a 25 basis point increase from the Fed and will look to the statement for any change of rhetoric signaling the Feds intent for future increases. Economic and financial analysts are looking forward to the Presidents speech tonight in hopes he will unveil some of the detail behind his proposal to overhaul Social Security. To date there has been a great deal of generalities with Social Security reform, but very little on the detailed implementation of the proposed changes. Analysts want to see the specifics so they can put a pencil to the financial impact throughout the economy.

Stocks, bonds and currencies are all trading with very little volatility. The Dow Industrials dipped eight points at the open, was higher by 44 points about two-and-a-half hours into the session, and has been treading water in a sideways chop since then. Five, ten and thirty-year treasury debt have been lower for most of the session, but down by only a tenth of a percentage point. The U.S. dollar traded lower at the open, but it didnt last for very long as buying came in to push the dollar slightly into positive territory. The dollar index is just hovering one-fourth of one-percent higher, with all the major currencies lower by the same fractional amount. The age-old currencies of gold and silver have been held in check, especially since the weak GDP report on Friday. The dollar should have tanked with precious metals rising, but you wont see much change until we get through the Fed-speak today, State of the Union address tonight, and the G-7 meeting this weekend in Switzerland.


In the near-term, shortening the maturity of our national debt brings down our cost of interest payments, but for the long-term this is not good. It is the same as the government taking out a variable rate loan when they should be locking-in historically low rates for the longer-term. This tells me there is no real intent to pay back the previously borrowed moneyjust keep re-financing the debt. Based on Jims statement above, this should all come to a head in the next two years, but probably sooner than later as the quarterly refundings promise to grow much larger as each quarter passes. Hopefully we can get past all of the huge debt problems we have in this country. My biggest concern is simply that we will not come to a peaceful resolution with our foreign creditors. A non-peaceful resolution will start with currency wars, then trade wars, and finally to military conflict. The international conflicts we face today are not getting any easier, especially as we compete internationally for available energy reserves. At the same time, we depend on the international financial community to loan us $2 billion a day to keep things afloat.


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  -STOCK MARKET WATCH, Thursday 3 February ozymandius  Feb-03-05 06:03 AM   #0 
  - Morning Ozy. Nice toon again today.  54anickel   Feb-03-05 06:56 AM   #1 
  - Good morning 54anickel and everyone.  ozymandius   Feb-03-05 08:10 AM   #21 
     - Fixing self-made problems (Heh, love that title!)  54anickel   Feb-03-05 08:15 AM   #24 
  - Dollar Watch  54anickel   Feb-03-05 07:08 AM   #2 
  - U.S. Dollar Down Against Euro Despit  54anickel   Feb-03-05 08:19 AM   #25 
  - Dollar Up After ECB Leaves Rates Steady  54anickel   Feb-03-05 11:09 AM   #43 
     - Is anybody else confused?  TrogL   Feb-03-05 02:45 PM   #56 
        - It's in the timing of the article release. The 2nd article was after the  54anickel   Feb-03-05 05:24 PM   #59 
  - Room to move Fed still has a ways to go before rates hit 'neutral' point  RawMaterials   Feb-03-05 07:11 AM   #3 
  - Are Commodity Prices Headed for Switch to Euros?  54anickel   Feb-03-05 07:11 AM   #4 
  - Trying to get back into things a bit  Maeve   Feb-03-05 07:12 AM   #5 
  - Maeve!!! Good to see you again. It's MAEVE DAY!  54anickel   Feb-03-05 07:17 AM   #9 
  - All hail Maeve, Queen of Connacht!  ozymandius   Feb-03-05 08:13 AM   #23 
     - I'm sending some of the last illustrations to my editor right now  Maeve   Feb-03-05 08:19 AM   #26 
        - That's great Maeve - I'll be PMin' ya to get my reserved copy. Sorry  54anickel   Feb-03-05 08:43 AM   #29 
  - U.S. Stock-Index Futures Fall on Growth Concern; Amazon Drops  RawMaterials   Feb-03-05 07:14 AM   #6 
  - U.S. Takes Over Three US Air Pension Plans (small blurb)  54anickel   Feb-03-05 07:14 AM   #7 
  - Oil Falls to 3-Week Low After U.S. Gasoline Stockpiles Increase  RawMaterials   Feb-03-05 07:16 AM   #8 
  - 'Zero intelligence' trading closely mimics stock market  54anickel   Feb-03-05 07:19 AM   #10 
  - Will Central Banks Ever Say No to America?  RawMaterials   Feb-03-05 07:20 AM   #11 
  - Saw that one out there, was posted here last week - worth repeating  54anickel   Feb-03-05 07:33 AM   #13 
  - Things Change (another inverted yields speculator)  54anickel   Feb-03-05 07:30 AM   #12 
  - The Fraud of Fractional Banking (Mogambo warning)  54anickel   Feb-03-05 07:37 AM   #14 
  - Productivity Rises, Extends 3-Year Streak (However...)  54anickel   Feb-03-05 07:50 AM   #15 
  - Treasuries Fall After Productivity Grew Less Than Forecast  54anickel   Feb-03-05 08:57 AM   #30 
  - Falling Spreads Bear Dollar Reality  54anickel   Feb-03-05 07:54 AM   #16 
  - Today's reports:  54anickel   Feb-03-05 08:01 AM   #17 
  - Okay--Initail Claims good, Productivity bad  Maeve   Feb-03-05 08:04 AM   #19 
  - Heh-heh, but ya gotta love the spin they put on those productivity  54anickel   Feb-03-05 08:06 AM   #20 
  - ISM services index falls to 59.2% for January  54anickel   Feb-03-05 11:15 AM   #45 
  - December factory orders disappoint (BUT)  54anickel   Feb-03-05 11:18 AM   #46 
  - Futures charts don't look too happy at the moment...n/t  54anickel   Feb-03-05 08:02 AM   #18 
  - Pre Open Market Update  RawMaterials   Feb-03-05 08:11 AM   #22 
  - Today's WrapUp by Mike Hartman (Fed news)  ozymandius   Feb-03-05 08:20 AM   #27 
  - GACK!  54anickel   Feb-03-05 08:38 AM   #28 
  - A Mega-Deal with Job Cuts to Match  54anickel   Feb-03-05 09:00 AM   #31 
  - Fed's Increase Is Case of Perfect Transparency (interesting part on labor)  54anickel   Feb-03-05 09:14 AM   #32 
  - 10:14 numbers and yada  54anickel   Feb-03-05 09:15 AM   #33 
  - Participants Would Forfeit Part of Accounts' Profits  54anickel   Feb-03-05 09:32 AM   #34 
  - Goo,d lord, they've completely changed the story - nothing like making  54anickel   Feb-03-05 05:21 PM   #58 
  - Massachusetts Probing Gillette Payouts  54anickel   Feb-03-05 09:46 AM   #35 
  - Qwest in Talks to Buy MCI -- WSJ  54anickel   Feb-03-05 09:49 AM   #36 
  - Shell cuts oil and gas reserves by a further 10%  54anickel   Feb-03-05 09:53 AM   #37 
  - Bond Ratings: Another M&A Casualty?  54anickel   Feb-03-05 09:56 AM   #38 
  - WorldCom's $54M settlement collapses  54anickel   Feb-03-05 09:59 AM   #39 
  - Higher Interest Rates and Slower Earnings Growth  54anickel   Feb-03-05 10:06 AM   #40 
  - ALL SIGNS POINT TO BUBBLE (Last article at The Daily Reckoning)  54anickel   Feb-03-05 10:27 AM   #41 
  - High noon numbers Single  54anickel   Feb-03-05 11:04 AM   #42 
  - From our good friend Atrios - on a privatized SS system  ozymandius   Feb-03-05 11:34 AM   #47 
     - Good grief! That table is an eye-opener. Sheesh, maybe I'll just  54anickel   Feb-03-05 11:47 AM   #48 
  - U.S. Retailers' January Sales Rise More Than Expected  MARALE   Feb-03-05 11:10 AM   #44 
  - probably from redemption of Christmas gift cards  realFedUp   Feb-03-05 12:06 PM   #49 
  - Jan. Retail Sales Up on Holiday Clearance (& gift cards)  54anickel   Feb-03-05 12:18 PM   #51 
  - dupe  realFedUp   Feb-03-05 12:06 PM   #50 
  - 1:25 numbers and yada  54anickel   Feb-03-05 12:27 PM   #52 
  - Market Update 2:30  MARALE   Feb-03-05 01:45 PM   #53 
  - Market Update and Blather  RawMaterials   Feb-03-05 02:24 PM   #54 
  - Data Holds Job-Growth Hope,Inflation Fear  RawMaterials   Feb-03-05 02:37 PM   #55 
  - Closing numbers and blather  RawMaterials   Feb-03-05 03:07 PM   #57 

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