Tuesday, December 11, 2007

I have to admit, I am baffled by the markets reaction to the rate cut today.

Logic would dictate that with a fed rate cut, the stock market would have a great day. Gold, Oil, and Commodities would soar as smart investors who wanted to preserve their wealth would flee to these "safe havens" as a hedge against inflation.

The dollar would continue to crash, and I could write a very entertaining post bashing Bernanke for all to enjoy.

However, It seemed like everyone was annoyed with the quarter point rate cut.

The stock market had a sell off because they were expecting a larger cut, Gold went down, and the dollar index actually went up.

I have to admit I am very confused about the days events, and all i really have to offer you is a cute picture of a cat.

1 comment:

Malcolm said...

I'm not so surprised.

I think people in general have adopted a "wait and see" attitude.

Since this involves waiting, and seeing as opposed to mortgaging and buying, it's killing everyone.

That and the fact that people are starting to wise up about the real situation.

They know that rate cuts don't mean anything if there is no demand.

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