My impression on the Market is that it is the Wall Street(ers) trying to game the system. They want lower rates because it will allow them cheaper financing for purchases on margin as well as mergers/acquisitions. Panic helps sell this idea to the Fed. The Wall Street(ers) also make money on transactions/movement. Right now the market doesn’t want to go anywhere until the risks on the sub-prime/Alt-A CDOs/MBS(s) have been figured out (as well as who owns them). Therefore the Wall Street(ers) try to cause churn in the market (up/down/up/down movement) to get their transactions/movement. A good read on this would be looking at the ‘Cramer’ games Jim Cramer was playing when he was a Hedge fund manager. Panic the crowds, followed by exciting the crowds, back to panic etc. I have given this behavior a term: “Trampolining the Market”.
Some items on the market are PE cheap, some are expensive. Just pick and choose.. and let the market fluctuations work for you…
