Comments on: Bernanke’s Moment of Truth: 25 or 50 bp Cut? http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html Freshly squeezed market commentary & analysis Wed, 07 Jan 2009 14:23:30 +0000 http://wordpress.org/?v=2.0.2 by: Long Term Chart: Fed Funds Minus 90 Day T-Bill Rate http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-33245 Thu, 22 May 2008 22:50:29 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-33245 [...] The most important thing to take away from this is that there definitely is a relationship between these two financial instruments. Their long term average difference is so small: 28.9 basis points. And they tend to follow each other around most of the time. This isn’t surprising though since just a glance at the two charts side by side going back to the 1940’s shows their relationship. [...] […] The most important thing to take away from this is that there definitely is a relationship between these two financial instruments. Their long term average difference is so small: 28.9 basis points. And they tend to follow each other around most of the time. This isn’t surprising though since just a glance at the two charts side by side going back to the 1940’s shows their relationship. […]

]]> by: Fed Will Cut Rates Again Before 2008 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17936 Mon, 24 Sep 2007 21:13:51 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17936 [...] Last week, I featured a long term chart of the 3 month T-Bill rate along with the Fed rate to show how the former leads the latter. From this I surmised (correctly) that the Fed would cut rates 50 bp to bring them closer to the rate set by the bond market. [...] […] Last week, I featured a long term chart of the 3 month T-Bill rate along with the Fed rate to show how the former leads the latter. From this I surmised (correctly) that the Fed would cut rates 50 bp to bring them closer to the rate set by the bond market. […]

]]> by: Extreme Positive Breadth Signals Coming Rally http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17360 Wed, 19 Sep 2007 21:54:08 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17360 [...] Yesterday’s Fed rate cut of 50 basis points (which I predicted based on the fixed income market) threw the market into a buying frenzy. It carried over into today’s session also, but yesterday’s was absolutely breathtaking. [...] […] Yesterday’s Fed rate cut of 50 basis points (which I predicted based on the fixed income market) threw the market into a buying frenzy. It carried over into today’s session also, but yesterday’s was absolutely breathtaking. […]

]]> by: Shepard http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17333 Tue, 18 Sep 2007 21:56:06 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17333 Well...not that I mind a 300 DOW day ... I'm long (or was) heavily and did well today, but I wonder about the dollar. Has it become irrelevant? /Keith Well…not that I mind a 300 DOW day … I’m long (or was) heavily and did well today, but I wonder about the dollar. Has it become irrelevant?

/Keith

]]> by: Babak http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17329 Tue, 18 Sep 2007 17:25:48 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17329 Max, what the govt doesn't control is demand. And because of that there is only an illusion of control. It is not easy to see in the graph but T-Bills move before Fed Funds. Just look closely. A good example is in early '70s. Max,
what the govt doesn’t control is demand. And because of that there is only an illusion of control. It is not easy to see in the graph but T-Bills move before Fed Funds. Just look closely. A good example is in early ’70s.

]]> by: Max http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17328 Tue, 18 Sep 2007 17:02:07 +0000 http://www.tradersnarrative.com/bernankes-moment-of-truth-25-or-50-bp-cut-1326.html#comment-17328 Your graph shows correlation, but correlation is not causation. The short-term T-bill rate is driven by simple supply and demand of T-bills. But where does that supply come from? The government. If the government controls the supply of T-bills, then it controls the rate, NOT the market as you imply. Isn't your argument thus a chicken- and- egg argument? Your graph shows correlation, but correlation is not causation. The short-term T-bill rate is driven by simple supply and demand of T-bills. But where does that supply come from? The government. If the government controls the supply of T-bills, then it controls the rate, NOT the market as you imply. Isn’t your argument thus a chicken- and- egg argument?

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