Cramer: "Can't Rule Out Further Rate Hikes"
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EnglishMan
"The stomach is 80% full".
Abraços.
EnglishMan
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Bons negócios. EnglishMan
Cramer: "Can't Rule Out Further Rate Hikes"
"Can't Rule Out Further Rate Hikes"
By Jim Cramer
RealMoney.com Columnist
10/16/2006 9:12 AM EDT
"If you want to trace out what the bears have here, you need to look at two things:
The market is dramatically overbought, meaning it has been up huge in a straight line.
You can no longer take the rate hike off the table.
If you think back to what made the Federal Reserve pause to begin with, it was gasoline going from $2.25 to $3.24 with the prospect of it going to $4. That plus the housing bubble being pricked made the Fed think, "We are done."
The astonishing decline in oil and gasoline, coupled with the sense that the worst may be over in housing -- I don't agree, I believe that happens six months from now -- has made the Fed feel the heat again. The fact that long rates are moving back up tells me you are wrong to believe that the Fed is done.
So many stocks moved because of multiple expansion that it means there is a real priced-for-perfection problem here. Given the overbought nature, you have to expect that any further talk from Fed governors or presidents about higher rates will take the market down 300 points on the Dow and it wouldn't shock anyone.
That's the risk. It can't be ruled out. I just wanted to give you the other side of the trade."
(in www.realmoney.com)
By Jim Cramer
RealMoney.com Columnist
10/16/2006 9:12 AM EDT
"If you want to trace out what the bears have here, you need to look at two things:
The market is dramatically overbought, meaning it has been up huge in a straight line.
You can no longer take the rate hike off the table.
If you think back to what made the Federal Reserve pause to begin with, it was gasoline going from $2.25 to $3.24 with the prospect of it going to $4. That plus the housing bubble being pricked made the Fed think, "We are done."
The astonishing decline in oil and gasoline, coupled with the sense that the worst may be over in housing -- I don't agree, I believe that happens six months from now -- has made the Fed feel the heat again. The fact that long rates are moving back up tells me you are wrong to believe that the Fed is done.
So many stocks moved because of multiple expansion that it means there is a real priced-for-perfection problem here. Given the overbought nature, you have to expect that any further talk from Fed governors or presidents about higher rates will take the market down 300 points on the Dow and it wouldn't shock anyone.
That's the risk. It can't be ruled out. I just wanted to give you the other side of the trade."
(in www.realmoney.com)
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