About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, October 29, 2008

Monetary Policy

As was widely expected, the FOMC today cut the FFR% to 1.0%.
The longstanding cornerstone indicators suggested as much, and
the Fed indicated increased confidence that, with weakening
economic demand and falling operating rates, inflation would
subside to a low level over the next several quarters. They might
have spooked the markets had They not cut. Also, such forbearance
might have handed Sen. Obama another stick to use to whup
the GOP establishment.

The move will backfire if it is the proximate cause for a sell-off in
the US$ and sharp rally in the oil price. Should the latter occur,
it would ultimately put more cost pressure into a weakened system.

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