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TranceAddict Investors Club @ Marketocracy (pg. 26)
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| Krypton |
Important Announcement...Fed lowers rate .25%. Awesome, the dollar will suffer even more. Perhaps its mathematical equilization. If we don't stop outspending ourselves, the market will correct itself. That may mean a falling dollar, thus narrowing the trade deficit, making foreign investment easier in this country, but limiting our own spending power abroad. Exports will increase and imports might hopefully be stalled or fall a little. Inflation will be increasing.
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Fed Cuts Interest Rate by Quarter Point
Wednesday October 31, 3:06 pm ET
By Martin Crutsinger, AP Economics Writer
Fed Cuts Key Interest Rate for a Second Time to Guard Against Recession Threats
WASHINGTON (AP) -- The Federal Reserve, confronted with surging oil prices and a slumping housing market, cut a key interest rate by a quarter-point on Wednesday, but signaled that may be all the rate relief the economy needs right now.
The central bank lowered the federal funds rate to 4.5 percent, as had been expected. But while financial markets had hoped for a clear signal that further rate cuts could be forthcoming, the central bank instead signaled that the September and October rate cuts may be it.
While economists are worried that growth will slow dramatically in the current quarter under the impact of a deepening housing slump, a severe credit crisis and record-high oil prices, the Fed sounded a more upbeat tone.
The central bank also expressed continued worries about inflation and said it believed after the two rate cuts, the risks between week growth and higher inflation were roughly balanced.
"The odds of another rate cut at the December meeting are substantially less than they were before this statement," said David Jones, chief economist at DMJ Advisors in Denver. Jones said he still expected one more rate cut to deal with a weak economy but that it will most likely come at the Fed's January meeting.
Wall Street sagged a bit immediately after the announcement, but then quickly regained its footing and was up more than 120 points in late afternoon trading.
In a brief statement explaining the decision, Federal Reserve Chairman Ben Bernanke and his colleagues said that the central bank now judges that "the upside risks to inflation roughly balance the downside risks to growth."
By stating that risks are now roughly balanced, the Fed was seen as signaling that it judges that further rate cuts may not be necessary.
The Fed's decision came on a 9-1 vote with Thomas Hoenig, president of the Kansas City regional Fed bank dissenting, arguing that he preferred no change in the funds rate. The Fed had lowered the funds rate by a bolder half-point at its Sept. 18 meeting.
Commenting on the economy, the Fed struck a more positive tone than it did last month when it expressed concerns about the toll the August credit crisis would take on housing and the overall economy.
In the current statement, the Fed said, "Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance."
The central bank said the pace of the economic expansion "will likely slow in the near term, partly reflecting the intensification of the housing correction."
The Fed met on the same day the government announced that the overall economy grew at a stronger-than-expected 3.9 percent rate in the July-September quarter. Many economists believe growth will dip to around 2 percent in the current quarter and may slow even further to around 1 percent in the first three months of next year.
On inflation, the central bank said the reading on core inflation, which excludes energy and food, had "improved modestly this year" but expressed worries about what the recent increases in energy prices and other commodities might do to inflation pressures going forward.
The committee said that "some inflation risks remain," a signal that it will be hesitant to cut rates further because of concerns on inflation.
The Fed had pushed the federal funds rate up a record 17 consecutive times in quarter-point moves over two years. The last increase occurred in June 2006. From that time until last month, the rate was left unchanged as the central bank watched to see whether its credit tightening had the desired effect of slowing the economy enough to lessen inflation pressures.
However, the Fed's goal of a soft-landing in which growth slows and inflation is contained has been threatened by the most severe housing downturn in more than two decades. Economists are worried that the credit crisis this summer will make home sales and prices fall even further, threatening consumer confidence and causing consumers to cut back on their spending.
Bernanke, who took over as Fed chairman in February 2006 from Alan Greenspan, came under criticism in August when the Fed left rates unchanged and declared that inflation was still the primary threat facing the economy.
But two days after that meeting when a severe credit crunch hit financial markets around the globe, the Fed went into action, providing billions of dollars in cash to the U.S. financial system, slashing the rate at which it makes direct loans to banks and then on Sept. 18 cutting the funds rate by a bigger-than-expected half point.
Lyle Gramley, a former Fed board member and now an economist with Stanford Financial Group, put the chances of a recession at around 40 percent, saying the Fed's primary concern right now is what is happening in housing and how much of a spillover that will have on the overall economy.
"It is possible that the housing industry will take us over the edge into a recession," he said, noting that every housing downturn of the past 60 years with the exception of two have triggered recessions. |
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| Krypton |
Inflation definitely is headed up. And as the dollar falls, dollar-denominated commodities such as oil, gold, silver, etc. will continue to rise.
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Fed Pumps $41B Into US Financial System
Thursday November 1, 4:23 pm ET
By Jeannine Aversa, AP Economics Writer
Fed Injects $41 Billion Into US Financial System to Help Ease Credit Problems
WASHINGTON (AP) -- The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, the largest cash infusion since September 2001, to help companies get through a credit crunch.
The action comes one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a key interest rate for the second time in six weeks to protect the economy from the ill effects of collapse in the housing market, aggravated by the credit troubles.
The cash injection also came as Wall Street took a nosedive Thursday. The Dow Jones industrials were down more than 260 points in afternoon trading.
The Fed on Wednesday ordered its key rate, called the federal funds rate, to be lowered by one-quarter percentage point to 4.50 percent. That followed up on a bolder, half-percentage point cut in September. Those two rate reductions might be sufficient to help the economy make its way safely through trouble spots, Fed policymakers indicated.
The funds rate affects many other interest rates charged to millions of individuals and businesses and is the Fed's most potent tool for influencing economic activity.
The Federal Reserve Bank of New York, which carries out the central bank's open market operations, moved Thursday to inject $41 billion in temporary reserves into the U.S financial system. It came as part of ongoing efforts designed to ensure that the markets -- which have suffered through a period of turbulence over the last few months -- function smoothly. The cash infusion came in three separate operations.
A New York Fed spokesman said it was the largest single day of operations since $50.35 billion was pumped into the system on Sept. 19, 2001, following the terror strikes on New York and Washington. He declined further comment.
Fed policymakers at their meeting on Wednesday noted that the "strains from financial markets have eased somewhat on balance." Still many Fed officials in the last week have described the state of financial markets as fragile. Bernanke and other Fed officials have said it will take time for the markets to fully recover from the credit crisis.
Since August, the Fed has been pumping cash into the financial system to help ease strains from the credit crunch. It also has cut its lending rate to banks -- a third such cut came on Wednesday. The Fed also has ordered two reductions to its most important interest rate, the funds rate, to help the situation. |
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| Krypton |
Big loss today. I lost 3%. But even if it was real money, I still wouldn't lose sleep. Being a bottom-up investor, my company's have the fundamentals. I'm not worried what the stock does. I know good company's over time always will be profitable.
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Stocks Plunge; Dow Drops More Than 360
Thursday November 1, 5:06 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street Plunges on Fears That Interest Rate Cuts Will End Even As Economy Is Weakening
NEW YORK (AP) -- Wall Street plunged Thursday, pulling the Dow Jones industrial average down more than 360 points as investors found themselves confronted by two uncomfortable prospects: an end to interest rate cuts and a slowing economy.
Mindful of a warning from the Federal Reserve Wednesday about inflation, the market nervously watched the price of oil, which passed $96 a barrel overnight for the first time before dipping on profit-taking. The Fed, which cut interest rates a quarter point, said in a statement that inflation remained a concern, and oil's ascent to another record raised the possibility not only that the Fed might stop cutting rates, but that it might even consider raising them if inflation accelerates.
Meanwhile, Wall Street also had to contend with concerns about a slowing economy. A report from the Commerce Department indicated consumers scaled back their spending in September as worries mounted about a worsening housing market and further credit market turmoil. And a trade group reported that manufacturing in the U.S. grew in October at the weakest pace since March.
The combination of factors led investors to pull back sharply from Wednesday's rally, in which the Dow climbed 137 points after the Fed said the economy had weathered the summer's credit crisis.
"Wall Street is in love with the idea of a rate cut, and realized that the Fed said inflation is still a concern -- that lowered the chances of a cut in December," said Ryan Detrick, a senior technical strategist with Schaeffer's Investment Research. "We're now feeling the pain now that investors have slept on it, and figured out what they said."
Christopher Cordaro, chief investment officer at RegentAtlantic Capital, said Wall Street remains anxious about the possibility of recession. He also believes the market is devoid of enough positive news "to have any type of sustained rally."
Investors were unswayed when the Fed pumped $41 billion into the U.S. financial system, one of its largest cash infusions since the credit crisis began in the summer. This increases the amount of money banks have to lend, and helps improve liquidity. In the past, such an action helped soothe the market, but that was not the case Thursday.
With the market growing pessimistic about the economy, the Labor Department's report on October jobs creation, scheduled to be released Friday morning, will be taking on even more importance than it usually has. The data is expected to show unemployment remained steady in October, with payroll growth of 85,000 new jobs, compared with 110,000 in September.
The Dow fell 362.14, or 2.60 percent, to 13,567.87.
The Standard & Poor's 500 index was off 40.94, or 2.64 percent, at 1,508.44, while the Nasdaq composite index dropped 64.29, or 2.25 percent, to 2,794.83.
Big late-session moves became common on Wall Street during the summer. Investors remain hopeful that a down market will turn around, but tend to launch a late afternoon selloff if that doesn't happen.
"We've been getting all these mixed signals, and this is just a confluence of bad news between the Fed, the financials, and this mixed earnings season," said Chris Johnson, president of Johnson Research Group.
Financial stocks were pummeled after Citigroup Inc. and Bank of America Corp., the two biggest U.S. banks, were downgraded by CIBC World Markets on worries about the credit markets.
Investors pulling money out of stocks turned to the safe haven of the Treasury market. The yield on the 10-year Treasury note dropped to 4.34 percent from 4.47 percent late Wednesday.
Crude prices vaulted above $96 per barrel in overnight trading. A barrel of light sweet crude settled down $1.04 at $93.49 on the New York Mercantile Exchange.
The Commerce Department's report that consumer spending rose by 0.3 percent in September, slightly lower than the 0.4 percent increase that analysts expected, raised concerns about a slowing economy.
In addition, the performance of the manufacturing sector in October suggested that ongoing troubles in the housing and credit markets have seeped into the industrial sector. The Institute for Supply Management, a Tempe, Ariz.-based trade group, reported its manufacturing index registered 50.9, down from 52.0 in September and below expectations for 51.8. A reading above 50 indicates growth; below that spells contraction.
Also Thursday, the Labor Department said the number of people filing for unemployment benefits declined by a larger-than-expected 6,000 last week to total 327,000.
Wall Street was also troubled by the day's corporate news. Exxon Mobil Corp., the world's largest publicly traded oil company, reported third-quarter profit fell 10 percent because of lower refining and chemical margins. Shares of the Dow component dropped $3.49, or 3.8 percent to $88.50.
Bank of America, the No. 2 U.S. bank, dropped $2.57, or 5.3 percent, to $45.71. Citi, the nation's largest financial institution, dropped $2.85, or 6.9 percent to $38.51 -- its lowest level in four years.
Declining issues outnumbered advancers by about 4 to 1 on the New York Stock Exchange, where volume came to 1.74 billion shares, compared to 1.48 billion on Wednesday.
The Russell 2000 index of smaller companies was down 32.84, or 3.97 percent, at 795.18.
The plunge in U.S. stocks caused European bourses to tumble. Britain's FTSE 100 was down 2.17 percent, Germany's DAX index fell 1.77 percent, and France's CAC-40 dropped 2.09 percent. Japan's Nikkei stock average, which closed before U.S. markets opened, rose 0.79 percent. |
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| LazFX |
Have not checked this in a bit.
Decent 30 day return for not doing anything....
Who has a line on a new buy??? anyone? |
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| atbell |
I'm Inclined to give Barrik gold a shot.
Big solid company with lots of holdings.
Maybe look in to Monsanto or Cargill as food prices are set to take off.
As a note, I hold none of these. |
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| Krypton |
| quote: | Have not checked this in a bit.
Decent 30 day return for not doing anything....
Who has a line on a new buy??? anyone? |
I've analyzed over 1000 stocks mathematically and I always save the results. Do you want my buy list with the mathematical results for why they're buys. It'll be in December, because I only make myself official buy/sell lists during the last month of the quarter. I only buy in the last month of the quarter, but I sell half positions of my big losers, and if the fundamentals numbers are bad in the last month of the quarter, I sell them completely.
From -11% to -49% losses for these companies so far since October...
LRCX
CRDN
FCFS
RF
BBT
WB
PETM
CROX
TDW
COH
RES
ELOS
MBI
In December, I'll run their 3rd quarter results through the algorithm. If they have a fundamental strength (FS) of over 80, I'm buying enough shares to replace my losses. If they are FS 70-79, I sell half the position. If they are below FS 69, I sell the entire position no matter what time of the quarter.
But my lists have given me 15% gains since September, and that's with the volatile market. So watch this thread in the first week of December.
http://marketocracy.com/cgi-bin/Web...gMiPlKnMaKiAbDd
This is stuff I plan to publish online and hopefully get some subscription income, but I don't mind posting the analysis recommendations freely here. |
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| LazFX |
| quote: | Originally posted by Krypton
This is stuff I plan to publish online and hopefully get some subscription income, but I don't mind posting the analysis recommendations freely here. |
Thanks :) |
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| Shakka |
Krypton,
This may have already been discussed somewhere, but have you considered seeking the employ of a quant shop of some sort? If you have recorded results of your successes with your algorithm, you should have quite a leg up on the competition for some pretty lucrative options. The further back your historical records go, the better. Algorithms work until they don't!:disbelief |
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| Krypton |
| quote: | Originally posted by Shakka
Krypton,
This may have already been discussed somewhere, but have you considered seeking the employ of a quant shop of some sort? If you have recorded results of your successes with your algorithm, you should have quite a leg up on the competition for some pretty lucrative options. The further back your historical records go, the better. Algorithms work until they don't!:disbelief |
My resume would be impeccable for a junior analyst or internship position. I've already talked to the my company's financial affiliate Raymond James Financial. But their headquarters where I could get a spot is 40 miles away and logistically, it's just not possible for me. I live in the suburbs, and a lot of the investment houses are in downtown areas. So, in the meantime, I'm just studying for the bachelor's degree and working on algorithms, stock analysis, and trying to get this website development plan that I've got to get my talent of the fundamental strength and gamma metric out there in the public. One day, I'll get that first appointment with an investment house.
But, quant funds!? Where could I ever get a connect to one of those? I seriously do have an algorithmic system that could be a quant fund.:gsmile: You ever heard of mechanical investing? |
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| Krypton |
S&P 500 is displaying a bullish ascending triangle.
The top is 1550 with ascending lows starting from March 07. The technicals of the market are bullish right now, and this quarter will be a good time to buy. |
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| Shakka |
| quote: | Originally posted by Krypton
But, quant funds!? Where could I ever get a connect to one of those? I seriously do have an algorithmic system that could be a quant fund.:gsmile: You ever heard of mechanical investing? |
I didn't say it would be easy--it certainly helps to know someone so you can get your foot in the door, but it's certainly not impossible and sounds like something that might play to your strengths. Most of the big brokerage houses (Goldman I know for sure) run pretty big quant funds (many of them blew up this summer). Renaissance is a huge name in the quant area. There are tons of them--you just need to know how to ferret them out and who to call. The way in the door is probably some sort of internship or something. Maybe you send a letter along with your results and request an interview for an internship or something. Who knows where it could lead.
Or maybe you want to work on a farm and I'm just telling you you don't care about.;) |
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| Krypton |
| quote: | Originally posted by Shakka
I didn't say it would be easy--it certainly helps to know someone so you can get your foot in the door, but it's certainly not impossible and sounds like something that might play to your strengths. Most of the big brokerage houses (Goldman I know for sure) run pretty big quant funds (many of them blew up this summer). Renaissance is a huge name in the quant area. There are tons of them--you just need to know how to ferret them out and who to call. The way in the door is probably some sort of internship or something. Maybe you send a letter along with your results and request an interview for an internship or something. Who knows where it could lead.
Or maybe you want to work on a farm and I'm just telling you you don't care about.;) |
I 'm definitely looking for a big break. Maybe I'm just going too fast, I still don't have a BA. I'm thinking about typing up 3 stock reports, cover letter, and resume, and sending it randomly to the downtown banks and brokerages. I'm bound to get some response. |
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