Fed cuts discount rate by 50 basis point.

[GoUSC]

I will make some money on one (~10% in 2 weeks) and lose around 1% on the other…I am going to sell the shorts at opening and buy a levered ETF that follows the DOW change but double. I think there will be a nice pop today.

Fortunately this is all play money! 🙂

[HereWeGo]

I think I’m going to load up on EWJ. Japan market got wacked last night, and I’m thinking of loading up before the next trading session overseas.

Yeah, that might not be a bad idea. The bulls aren’t back in charge, but they’re probably back to even at this point.

[HereWeGo]

I think I’m going to load up on EWJ. Japan market got wacked last night, and I’m thinking of loading up before the next trading session overseas.

Yeah, that might not be a bad idea. The bulls aren’t back in charge, but they’re probably back to even at this point.

[HereWeGo]

I think I’m going to load up on EWJ. Japan market got wacked last night, and I’m thinking of loading up before the next trading session overseas.

Yeah, that might not be a bad idea. The bulls aren’t back in charge, but they’re probably back to even at this point.

[Chris Scoreboard Johnston]

This is exactly the type of thing I was warning everyone about Wed night. You cannot bet the farm on either side of the market when the market is that extended in the same direction. Obviously the opening is going to be wild, it remains to be seen what the whole day will bring. You need to trade smaller, not larger when volatility expands. If the average range size doubles, you need to trade half the amount you normally would to have equal risk. Do not plunge during these times, I can assure you in the end you will lose.

I was lucky yesterday in that my S&P system bought in at 1377, but I traded with smaller size due to the volatility that is at hand.

[Chris Scoreboard Johnston]

This is exactly the type of thing I was warning everyone about Wed night. You cannot bet the farm on either side of the market when the market is that extended in the same direction. Obviously the opening is going to be wild, it remains to be seen what the whole day will bring. You need to trade smaller, not larger when volatility expands. If the average range size doubles, you need to trade half the amount you normally would to have equal risk. Do not plunge during these times, I can assure you in the end you will lose.

I was lucky yesterday in that my S&P system bought in at 1377, but I traded with smaller size due to the volatility that is at hand.

[Chris Scoreboard Johnston]

This is exactly the type of thing I was warning everyone about Wed night. You cannot bet the farm on either side of the market when the market is that extended in the same direction. Obviously the opening is going to be wild, it remains to be seen what the whole day will bring. You need to trade smaller, not larger when volatility expands. If the average range size doubles, you need to trade half the amount you normally would to have equal risk. Do not plunge during these times, I can assure you in the end you will lose.

I was lucky yesterday in that my S&P system bought in at 1377, but I traded with smaller size due to the volatility that is at hand.

[HereWeGo]

Here’s the actual Fed release. I’ve bolded some areas that are very significant IMO:

“Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.”

“To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee’s target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks’ usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower.

These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.”

That’s a very good start, and it might indeed be sufficient.

[HereWeGo]

Here’s the actual Fed release. I’ve bolded some areas that are very significant IMO:

“Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.”

“To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee’s target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks’ usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower.

These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.”

That’s a very good start, and it might indeed be sufficient.

[HereWeGo]

Here’s the actual Fed release. I’ve bolded some areas that are very significant IMO:

“Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.”

“To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee’s target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks’ usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower.

These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.”

That’s a very good start, and it might indeed be sufficient.

[The-Shoveler]

Guy’s

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course).

No amount of band aids is going to change that.

20% raises anyone ????

[The-Shoveler]

Guy’s

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course).

No amount of band aids is going to change that.

20% raises anyone ????

[The-Shoveler]

Guy’s

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course).

No amount of band aids is going to change that.

20% raises anyone ????

[Coronita]

Thanks Chris for the advice. You’re advice is noted.

I haven’t short recently myself, just trying to move in and out of long positions on the volatility. But I’m going to stop any day now 🙂 And it’s just play money right now.

[Coronita]

Thanks Chris for the advice. You’re advice is noted.

I haven’t short recently myself, just trying to move in and out of long positions on the volatility. But I’m going to stop any day now 🙂 And it’s just play money right now.

[Author]

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