That isn't a lowering tide, it's the next tsunami

Who needs "talk like a pirate day" when you have the real thing?



Yes indeed, the Fed cut their interest rate today, sending the bulls galloping into the fresh tidal plain.

Stocks extended their rally on Wall Street today after Asian and European markets rose sharply in the wake of the Federal Reserve’s decision on Tuesday to cut interest rates by half a percentage point.

The Dow Jones industrial average advanced 0.6 percent, closing at 13,815.56, up 76.17. The Standard & Poor’s 500-stock index and the Nasdaq composite index had registered similar gains.

Stocks soared on Tuesday after the Fed’s aggressive action, with the Dow and the S.& P. 500 both posting their biggest single-day gains since early 2003. That momentum carried over today into Asia, where leading indexes were pushed to their highest levels in more than a month, and into Europe, where the main indexes all rose about 3 percent.

Analysts attributed most of the gains to lingering enthusiasm from the rate cut announcement.

“I think that pretty much swamps everything else,” said William Rhodes, chief investment strategist for Rhodes Analytics in Boston.

There were some signs today that the risk of inflation — a possible byproduct of the Fed’s rate cut — was abating. The Consumer Price Index, which measures prices at the retail level, fell 0.1 percent in August, according to the Labor Department, though the core index, which excludes food and energy, ticked up 0.2 percent. A recent surge in oil prices to record levels could also increase future inflationary pressures...

Ya think?

You won't read this in the 'Merikan main$tream, but The Telegraph sees the real wave coming:

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

The Fed's dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit -- expected to reach $850bn this year, or 6.5pc of GDP...

The Fed's dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit -- expected to reach $850bn this year, or 6.5pc of GDP...

Sail away, me hearties!