Tuesday, September 18, 2007

Waiting on the Fed

Everyone from Wall Street to Main Street seems to be holding their collective breath in anticipation of the Fed's decision on interest rates. Will it be a quarter or a half? We know it will be something, but will it be enough?

Theory has it, less than a half will be an absolute disaster and the market will return to its recent dumping ways. Wall Street desires a major impetus to get the market going again and the economy moving in the right direction.

The trouble is, Wall Street doesn't operate in such a black and white manner. In spite of how "big" the Stock Market seems and how "important" Wall Street projects itself, it is really like any small neighborhood where people spend a great deal of time simply talking. Once the euphoria of the half a point settles in, people will start asking questions. "Wow, one-half, does that mean that the economy is in worse shape than we initially thought?" This kind of discussion could put them back on the roller coaster.

Still, the market wants it and, short of one-half, it is likely to go back to its ugly ways we have seen over the last month. But people should not be fooled in thinking that there is a simple panacea to stock market problems.
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