September 16 is the next fed meeting. They were hinting a rate raise for the last 3 meetings, but I think a lot of bad stuff has happened since the last meeting and they will pass again this time and just keep hinting that one is coming soon. There still is nothing coming out that shows any real danger of inflation. I think the uncertaintly with that meeting is going to keep volume light for the next two weeks and we will probably see some more bad days. I also think people are having some acid reflux because China´s mouth just seems to not understand that people listen to it.
The FED is in a dammed if they do, dammed if they don't situation. Raise rates and the stock market will continue to slide upon investor concerns over stock prices. Keeping rates the same would show concern about the economy ala 'Why is our economy not growing with 0% interest rates?!' again weakening the market. I'm certain another asset purchasing program would smooth things over. Just don't call it QE4 for sake of the market.
They have been hinting at raising the rates for a long time, and after each meating the expected timeframe has been pushed back. I have no doubt this will be exactly the same. They will say that they see the economy as being alright and that raising the rates soon is a possibility etc. but they will do nothing. Not sure how the markets will react to this... probably not much simply because not many people are expecting them to announce anything surprising.
The standard advice I always hear is paying rent is dumb and buying a house is smart. You're right JR some people no matter what financial circumstances are just not cut out for home ownership. It takes thought and effort to maintain a home and a mortgage for that matter. Renting is a fine choice for many people. Properly managed properties run well, I lived in a few and known people where that's the perfect place for them. A standard and reasonable set of rules for obtaining a mortgage are good things to have.
The CNBC "Special Reports: Markets" I wrote about in message #2 above now shows on the cable program grid as a 1-hour live broadcast at 7-8 pm EDT. Set up the recorder, watch or listen on SiriusXM. It should be interesting. Whatever happens, don't get panicked into selling everything at the open tomorrow. There is too much money sitting on the sidelines to let this market completely crash. To put this pullback in perspective, the market in percentage terms declined 2% on Thursday and again 2% on Friday. The 3-digit absolute numbers of the various averages make things wrose than it is.
I heard these kind of rumors but honestly I don't think we're near that disaster happened in 2008 I think. I mean that would be quite awful even if the drop happened is quite terrifying.
Apologies for recommending the CNBC show. 30 minutes in, so far trashy, all scare, no tools or measures to watch for possible signs of the end of the decline. We already know the yuan devaluation is a contributor to the selloff. And no surprise that this quarter's earning reports were weak. The Obama economic recovery is putrid at best. Pfft.
There's definitely a dose of seasonality attached to what's going on at the moment. The May to September principle is often self fulfilling. But this is all part of the normalizaton of a world that had got drunk on cheap capital. Without the cheap capital China wouldn't have been able to inflate certain parts of its economy in the way it did, supporting commodity prices and manufacturing globally. Cheap money also papered over the cracks in Europe and allowed Greece, Portugal, Spain etc to grow so fast without bothering to properly collect taxes or by more efficient with their social programs. Who knows how this will play out but I'd expect more volatility in the near term.
Major dump this morning, but some things are already turning green. $AAPL crashed on open down to $95, at Noon back to $108 above Friday's close. $CSCO and $INTC same, a morning dump and now above Friday close. Obviously different sectors behave differently but all this fuss is presenting screaming buys. Just be careful on choices and timing.
I bought in a little AAPL at $100. I had a buy order in for about a week at that price as I thought it would be a good resistence level. I was suprised it dropped so quickly to 95 before bouncing right back.
