DOW Futures Down 426 AFTER 3/4 Point Fed Rate Cut

[propertymanager]

With world markets now starting to crater and the futures WAY down even after an emergency 3/4 point rate cut, we're in for a wild ride.  This demonstrates that the world is finally at least taking a glance at reality.  This WILL affect the real estate market.  As people lose their jobs; the consumer finally throws in the towel; and inflation raises it's ugly head - the rental market may improve and selling at retail may crater even further.

FASTEN YOUR SEATBELTS!  We're headed into a storm.

Mike

[motivatedceo]

Mike, you're a hoot. I've been watching the DJIA this morning too.

The good thing is, if the recession comes, we'll be OK. It's happened plenty of times in the past.

See
http://www.nber.org/cycles.html

The nice part is the long-term investors have nothing to worry about!

And it's a good buying opportunity!

The crazy part is in Texas all I can say is ... WHAT recession? I'm making more money than ever with my non-real estate investments.

But, come on recession...I want to buy some property CHEAP!

LOL

[jbaldwin]

Once the Fed Funds rate is cut how long is it typically until the prime rate falls also?  I have some properties under contract but I'm not sure if I should wait a few days, weeks, or whatever to secure the financing.  Which if timed right could be 75 basis pts. lower.

[realnew]

OOh, I love sales.  Hoard cash, buy low, sell high. Yay

[stevie-o]

You probably won't see the interest rate on your mortgage fall the same amount as the fed cut the discount rate - which is a different rate than the PRIME Rate. The Fed is still scheduled to meet later this month, which they will probably cut PRIME then by .50 or so.

Rates are super low right now, and will probably stay that way for a little while. Watch the 10 yr Treasury note fluctuate, when that is down - rates will go down.

[rookieNYC]

Today is one of the greatest days to be a trader...

Read my post from yesterday,it played out *exactly* like I thought...It was beautiful because after the fed cut rates the market did a classic knee jerk downward...Market has been rallying straight from the open...I love when people play into the doom and gloom...

[mishaniz]

I just started respecting rookyoNYC's opinions a whole lot more.  Anyone can make predictions about big rate cuts and market movements, but to get it right on the nose...  hats off to you!   

[NDLM]

rookieNYC

You can bet the fear is in the streets...Futures are currently down %4-%5 right now...Tomorrow's open will be interesting...Unless Bernake lowers interest rates before the open...I wouldn't be surprised and if does it will be the trade of the year...I will be long as much as I can buy for the day...But I honestly dont think Bernake lowers tomorrow...It's too close to the fed meeting at the end January...It will look like he is throwing a life raft to the market again...He has to lower .75 or more to do anything...Would be interesting if he does it pre-market tomorrow...The rally would be insane...Short covering squeeze like no other...

Yes, I have to take my hat off for RookieNYC for his market prediction.  However, there isn't any market rally, or short squeeze ... at all unless I misunderstood what he wrote ("The rally would be insane...Short covering squeeze like no other...")

[rookieNYC]

Tough crowd here...LOL...The day isnt over yet and I feel there is more upside but my money is made...I'm just watching for stops if we sell off...the trade was off the open...I predict we squeeze into the close...the shorts made their money and will look to cover before a rally...Let's see...

oh and NDLM...The dow rallied 300+ points from its lows...I would constitute that as a very strong rally...fwiw

[NDLM]

I have to agree with you.  Market does have upside potential  .  However, I don't bet on the market today at all.  As a matter of fact, I had safely relocated my assets into money market, and others a month ago.

People have been shorting for the past few weeks.  So even if they have to cover at the end of today...  I am sure they have already made tons of money.

Regards,

Newbie in RE (Based on the definition in http://www.reiclub.com/forums/index.php/topic,34026.0.html post)

[aak5454]

Once the Fed Funds rate is cut how long is it typically until the prime rate falls also?  I have some properties under contract but I'm not sure if I should wait a few days, weeks, or whatever to secure the financing.  Which if timed right could be 75 basis pts. lower.

a lot of finacing is linked to the 10yr T-bill or LIBOR which move fairly independant of the Fed funds rate and/or Prime rate.

if anything, underwriting stds are not getting easier so I would say you are better off to close as soon as possible.

[rookieNYC]

Dow rallied 350 points off the low of the day...gain of %3
Nasdaq rallied 70 points from the low of the day gain of %3.1
S&P rallied 36 points from the low of the day gain of %3

I post to share with everyone,not to make myself look smart or stupid..Another reason why I post is to show the market doubters that this isn't gambling or guessing...On a day like today any *good* not great,any good trader will know the odds are in favor of the market not selling much further after the fed cut this morning...But it takes huge nerve to put your money on the chopping block...That's the difference..

[Bluemoon06]

Yeh we got a rally

[NDLM]

The fact that stocks didn't continue their plunge later today was a positive sign, however economists and analysts said a full recovery wasn't likely in the near term, further rate cut is imminent (possibly another 50 basis point on Jan 30) in hoping for softer recession.

But then again, the *REAL* question is how many more rate cuts they can continue? Once they run out of the rate-cut ammunition, then what next?

[allagash]

I post to share with everyone,not to make myself look smart or stupid..Another reason why I post is to show the market doubters that this isn't gambling or guessing...On a day like today any *good* not great,any good trader will know the odds are in favor of the market not selling much further after the fed cut this morning...But it takes huge nerve to put your money on the chopping block...That's the difference..

Rookie....

Generally speaking...did you buy in more or less a half hour into the session....and then sell out later in the afternoon?  And/or was this at least half of your strategy....with maybe shorting prior to opening bell?

-Mike