RANsquawk Preview: FOMC Decisions - 29th October 2014

Comments

[AdvancingTime]

The Federal Reserve has failed to take serious efforts in pushing the government to take the necessary reforms needed to move the economy forward. Policy makers aided by the media thrive at presenting simplistic answers that solve both economic and society’s problems with little or no effort required from the masses.

What started as a program to support and prop up the economy has morphed into the main driver of economic data. Between the low interest rates that has propelled investors into high risk assets in search of a positive return on their money, and money being pumped into the system, the markets have become distorted and disconnected from the economy. The idea that investors will continue over the long term to pour money into the sky high equity market is flawed. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/06/exit-strategy-from-qe-remains-elusive.html

[Bloody Muppet]

Bullish!

[Temerity Trader]

Hmmm, I think I disagree. If the markets drop, more QE is coming for sure. So, exactly why would anyone sell their stocks knowing full well the Fed will support the markets at all times?  Everyone knows the worst case is the Fed allows a small “correction”, tries jawboning, and then if that doesn’t work, goes all in. Rates on savings accounts are practically negative, so that is a no-brainer. Interest rates will NEVER rise more than 1/4 point, and that is doubtful. Massive government deficit spending is here forever. So, yes, more money will pour into the markets, it is risk free now and 10-20% gains are the New Normal with unlimited Fed Bank support. Obviously millions of investors agree with me.