50bps cut - yeah baby!!!

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Old Jan 30, 2008, 8:26pm   #1
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50bps cut - yeah baby!!!

Wahay!!!

I just took a bit of a gamble and traded over the 50bps cut. I took +84 ticks out of the Dow just now... it's going to my drinking fund for this week.

By the way... I just used Capital Spreads. Don't try to use them over a number. Their interface took 40 nailbiting seconds to confirm my closing trade!
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Old Jan 30, 2008, 9:08pm   #2
 
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Originally Posted by RichieE View Post
Wahay!!!

I just took a bit of a gamble and traded over the 50bps cut. I took +84 ticks out of the Dow just now... it's going to my drinking fund for this week.

By the way... I just used Capital Spreads. Don't try to use them over a number. Their interface took 40 nailbiting seconds to confirm my closing trade!
CS web interface is better than CMCs but pre & post news pretty lame. Would recommend CMCs Java based platform
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Old Jan 30, 2008, 9:08pm   #3
 
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Well done, balls of steel needed for a trade like that! What's occupying my mind is the implications for other central banks, and I'm coming to the view that they are less likely to be cutting rates than they were previously, assuming that dollar FX doesn't become a factor. This because hopefully the US economy will be helped by these drastic cuts.

Of course if the US economy does crap out then this prediction has no merit.
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Old Jan 30, 2008, 9:17pm   #4
 
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Nice punt rich, all about stop limit orders left in the dax ladder baby!
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Old Jan 30, 2008, 9:23pm   #5
 
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delete me
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Old Jan 30, 2008, 9:30pm   #6
 
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Big Ben will keep printing money till we run out of trees! Looking very ugly for the greenback........
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Old Jan 30, 2008, 9:40pm   #7
 
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Originally Posted by arabianights View Post
Well done, balls of steel needed for a trade like that! What's occupying my mind is the implications for other central banks, and I'm coming to the view that they are less likely to be cutting rates than they were previously, assuming that dollar FX doesn't become a factor. This because hopefully the US economy will be helped by these drastic cuts.

Of course if the US economy does crap out then this prediction has no merit.
My bet would be on the other CBs will be cutting their rates too. But less than the US as ECB and BoE will be more hawkish on inflation.
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Old Jan 30, 2008, 10:37pm   #8
 
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Originally Posted by RichieE View Post
Wahay!!!

I just took a bit of a gamble and traded over the 50bps cut. I took +84 ticks out of the Dow just now... it's going to my drinking fund for this week.

By the way... I just used Capital Spreads. Don't try to use them over a number. Their interface took 40 nailbiting seconds to confirm my closing trade!
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Old Jan 30, 2008, 10:48pm   #9
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As it wasn't mentioned prior to the announcement I honestly expected only a 25-point cut. There was a big spike on Stoxx future and DAX cash just after 13:15 - I guessed that was it but it turned out (presumably)to be the ADP Employemnt data from the US. I've never heard of this indicator.

Anyway, the DOW gave everything back. I reckon the US market (and thus every other) will get worse - US data this week has been bad; another 50-point cut - this does sound like panic/alarm/desperation.

Grant.
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Old Jan 30, 2008, 11:02pm   #10
 
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no, 50% was expected, i did not expect the rally but i just went with the flow anyway, we should have always given everything back anyway, time for jobs Friday, markets have gone sideways for about 6 days after the biggish sell off.
So i think this jobs number could be the straw that breaks the camels back, up or down if it comes as enough of a shock.

I personally was hoping for no cut then for all hell to break loose, no retracements, just right down to zero
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Old Jan 31, 2008, 12:27am   #11
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Black-star,

I know 50 was expected but why didnít they mention it prior to the official time (as previous)? Maybe they didnít want to set a precedent.

Heavy day for US figs, Friday but tomorrow weíve got, amongst others, Initial Claims and Chicago PMI. Prior to the US open thereís also plenty of Figures for the Eurozone and Germany which may set the tone for the US.

What happens when they run out of ammo? Mega bail-out by China, if only to protect their own US bond holdings. Volatile next two days (weeks). Donít worry, Hell will break.

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Old Jan 31, 2008, 3:48am   #12
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Black-star,
What happens when they run out of ammo? Mega bail-out by China, if only to protect their own US bond holdings.

Grant
Any combination of the following will solve the problem -

Devaluation of the Dollar.
Massive bond buybacks.
Creation of a Sovereign Wealth Fund with authority to invest in shares, bonds, treasuries etc.
Moratorium on debt repayments.
Tax cuts and/or rebates.
Mass issuance of shopping vouchers.
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Old Jan 31, 2008, 9:35am   #13
 
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Any combination of the following will solve the problem -

Devaluation of the Dollar.
Massive bond buybacks.
Creation of a Sovereign Wealth Fund with authority to invest in shares, bonds, treasuries etc.
Moratorium on debt repayments.
Tax cuts and/or rebates.
Mass issuance of shopping vouchers.

Are you serious?

The only solution is rise in taxation to curb consumer demand and reduction in interest rates to stimulate investment and maintain low dollar.

US needs to balance Budget Defecit and BoP defecit.

Keep it simple.
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Old Jan 31, 2008, 12:38pm   #14
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Good one, LION63
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Old Feb 1, 2008, 2:07am   #15
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RichieE started this thread
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Originally Posted by arabianights View Post
Well done, balls of steel needed for a trade like that!
Come to think of it... that was quite a stupid strategy. I could have lost £100 rather than making £84. To anyone who is reading this thread, I am *not* recommending that anyone copies my kamakazi technique!
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Originally Posted by arabianights View Post
What's occupying my mind is the implications for other central banks, and I'm coming to the view that they are less likely to be cutting rates than they were previously, assuming that dollar FX doesn't become a factor. This because hopefully the US economy will be helped by these drastic cuts.
That's an interesting question. I suppose it boils down to whether a strengthening US economy will drag the rest of the world with it or whether the rest of the world is sufficiently decoupled from US.
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Of course if the US economy does crap out then this prediction has no merit.
If the 125bps cut in one week doesn't help then I reckon we're probably heading for stagflation. Great for my mortgage, not good for Bernanke!
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