http://blog.mutualdecision.com/articles/2007/09/12/living-for-the-moment en-us 40 Insight from the minds behind MUTUALdecision <div>The stock market was living for the moment last week.&nbsp;It rallied in response to strong retail sales, then took a 250 point nose dive at the end of the week over a poor jobs report.&nbsp;Problems with the subprime mortgage market and securitized debt of all types lurk in the background.&nbsp;The big question is what will the Fed do next Tuesday?&nbsp;An article in the New York Times over the weekend said a rate cut of 25 basis points is a sure thing.&nbsp;The only question is whether the Fed would cut fifty.&nbsp;</div> <div>&nbsp;</div> <div>The New York Times has a much larger circulation than this blog and many times the number of reporters (I have only me), but I think they&rsquo;re wrong on this one. &nbsp;Mr. Bernanke is not going to cut rates to placate a bunch of wealthy Wall Street types who are crying because they&rsquo;re no longer minting money.&nbsp;So I&rsquo;m going to that the other side of the bet.</div> <div>&nbsp;</div> <div>The Fed will not cut rates next week.&nbsp;The US economy is strong, the world economy is strong, the mortgage and securitization problems are being worked out in an orderly manner and one bad jobs report doesn&rsquo;t mean we&rsquo;re headed into a recession.&nbsp;Lastly, Mr. Bernanke will show Wall Street that he doesn&rsquo;t work for them.</div> <div>&nbsp;</div> <div>My scenario suggests another choppy week for the market this week, a decline next Tuesday (the 18^th) afternoon, although not as much as some would expect, then a slow upward trend.</div> Wed, 12 Sep 2007 01:43:00 -0500 urn:uuid:ba941f11-2c02-49a6-9ee3-6e579a6c0195 Bill Byrnes http://blog.mutualdecision.com/articles/2007/09/12/living-for-the-moment Market Mutual Funds Mutual fund blog Market Interest Rates US Economy