Thanks Chuck.RR might be wondering if the market has hit bottom....

Thanks Chuck.

RR might be wondering if the market has hit bottom. Tim Wood is in no doubt that it has NOT!

see http://www.financialsense.com/Market/wrapup.htm



Interesting finish to his article -

"Now, on another note I want to point out just how desperate the rate cut we saw on October 29, 2008 was. In looking back at my database I found that since 1943 the Fed has NEVER cut rates when the spread between the Discount rate and my blended end of week 3-month T-bill rate was less than 1.08%. With that being a weekly rate I obviously have no way to know what that blended rate was on Wednesday, but I can tell you that as of last Friday it was at 1.25% and with the Discount rate at 1.75%, this put the spread at a mere .50%. As of Tuesday's close I showed the 3-month T-bill rate at .77% which puts the spread at .98%. So, I can tell you that it is a matter of record that in the past 65 years they have NEVER cut with this spread less than 1.08%. Therefore, I can also tell you that Wednesday’s rate cut was an unprecedented event. I feel that the only reason the Fed made this cut was because the market was expecting that cut and they were scared of the consequences if they disappointed the market. That being said, if the market has already fallen well over 40% with the cut from 6.25% to 1.75%, do you really think that additional cuts at this point will matter?

Sure, there will be bounces along the way, but we have entered a secular bear market that was led by the largest credit bubble in history. This is not something that can be fixed by cutting rates and throwing more credit at the system. The facts clearly show that the Fed follows the short-term credit markets and that the October 29, 2008 cut was a desperate and unprecedented event. The continued bailouts, stimulus packages and rate cuts are all just desperate attempts by the braniacs that got us into this mess in the first place. Don’t buy the propaganda when and if a bounce begins. This bear market is not over. You have been warned! "


cheers

dub