What will the fed do next to keep dow above 11000

my question is what will the feds do to keep the dow about 10000

To be honest, the Fed has much more important dangers to avert than the equity market right now.

The equity markets will be fine. Much of this is due to mark-to-market accounting rules that in certain cases don't make sense. When a market reappears for these underlying securities, there will be huge write-ups.

The economy has slowed, but not disastrously. $4 gas is a shock, but not much worse than it was in the 70's. Housing will deflate massively but it has to - it is a bubble, unsustainable by incomes. With luck someone in Washington and Albany will finally understand that the government - like households - can't borrow to pay operating expenses. But that last one's a long-shot.

So now you guys want a bailout? HA HA HA HA.

The Fed has no mandate to keep the stock market at any level. It's job is to control monetary policy to balance growth while guarding against inflation. While it's true that these factors are reflected to some extent in the stock market and that the level of stocks might be one factor the Fed uses in forming monetary policy, it is by no means the Fed's job to keep the Dow (or any index, for that matter) above or below any level.

BTW: To answer your questions:

Real-interest-rates are already negative.
Bernanke's beard wouldn't get one drop of oil from the Saudi's.
Bush isn't even aware there's a looming economic crisis.
Spunky is too busy stalking Stevejhx.

iMom, spunky has disappeared ever since it's been plainly obvious that it's better to rent than to buy.

"It's job is to control monetary policy to balance growth while guarding against inflation."

That is its advertised role. Very different from reality.

Please watch this very enlightening video:

http://video.google.com/videoplay?docid=-466210540567002553

As always, MANY thanks to the Ludwig von Mises Institute

BTW- LOVE how a "young" RON PAUL appears near the end of the video at 39:20.

Also, the MOST important part of the video, when Nixon basically abolished the Gold standard and enabled the FED to create money out of thin air starts at -> 32:36

well, look, everyone -- if people could figure out how to make millions by selling people drinking water and changing the design of a backpack to accommodate the shape of a plastic bottle containing drinking water, I'm confident that someone else will figure out how to make money charging people to breathe, and that will stimulate the economy and then Obama and McCain can duke it out over whose plan to increase nuclear power generation is responsible for it all -- are you sure beards can't be exchanged like a commodity?

We are already in a bear market. Dow will correct 36% from its top level of 14200. We will most probably see Dow at 10,000 by year end. Ofcourse there will be sharp rallies along the way. Fed has lost control of our economy.

Short Tech & Financials and long commodities.

No, iMom, Spunky disappeared along with his financial picks. Maybe I'm wrong, and if he holds C for 20 or so years he'll get a great return, but I don't think so.

Yes, C. The Incredible Shrinking Bank.

There are 2 banks that will make you money in the long-term. JPM and BAC. Anything else, RUN!

Nope I am now short the S and P, the QQQQ, all Financials stocks. Going long Oil. Buying Gold and selling short all home bulder stocks.. How can I lose. I am going to make a ton of money.

Oh I forgot I am shorting the hell out of DIA.

I bet aboutready has a beard.

May be time to start buying financials. See XLF
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=xlf&sid=0&o_symb=xlf&freq=2&time=13

Peanubbajelly, that would not be a smart move at this point. Trying to catch a falling knife is very risky and should only be done with money that you can afford to lose (i.e. low risk premium for that investment strategy).

I'm confused -- we're in a bear market, and people want to sell?

What happened to buy low, sell high? What happened to invest for the long term?

Would you wait for everything to get hunky dory and financials to go back to their old highs, and then buy them? I'm not being sarcastic, which I realize is rare for this message board, but I really am curious about this.

lowery, without getting into too much details, in a Bear market, Bear market rules apply:

* Oversold conditions should be viewed as extremely dangerous. Whereas in bull markets oversold lows usually present buying opportunities, in bear markets they can often resolve into more heavy selling.

* Overbought conditions in a bear market are most likely to signal that a trading top is at hand.

* While bear market rallies present great profit opportunities, long positions should be managed as short-term only.

refer to this old article from back in January (which correctly predicted what's happening now):
http://www.decisionpoint.com/ChartSpotliteFiles/080118_bear.html

Hope that adds some perspective.

spunky - I guess that will get your money back from your C at 27 and MER at 46 call. May luck be with you.

I doubt it, I think there'll be a rally now, surely another round of "quant" funds is about ready to fall off a cliff and they'll be panicking out of their shorts.

I must admit I am fairly long at these levels, having timed the bounce about 600 points too early. Doh. Thing is, bear market rallies come when dont expect it and last longer than you would think. They are sharp and fierce. But at these broken technical levels and news like FRE,FNM, and LEH down 15%, its kind of scary that a crisis of confidence is about to happen again and an event may occur

I can't see how FRE would fail (famous last words, I know). Paulson will just lend them his money printing machine for a while.

the can be nationalized, and stocks go to 0...

LEH short was a great call. Next sector to fall is a real estate investment trust (REIT) funds. I am looking to short SPG.

MMafia - thanks. I think I sort of almost understand. In other words, no matter what anyone says, you have to "time the market" and "pick the bottom." Hard to do, of course.

It will just keep the lending window open. Imagine if you went to Vegas and hit the tables. Odds are that the house will win most of your money. The reason they win is not just because the odds are in their favor, but it's also because they have more money then you. They have an endless supply of money. If you had the same advantage you would never lose. You would just keep betting until it brings you even. In essence that is exactly what the FED is doing with the Banks. They are telling them, don't worry the money will be here until you no longer need it. This has created an artificial market that will eventually catch-up and make us all pay. What is this going to cost the tax payers. The price is going to be off the charts. Constant intervention from the FED and the lying on wall street will make things much worse for years to come.

They better do something quik, because it looks like Lehman is going under. Oh, that's right the FED will just let them borrow money from the tax payers. It's like a crack-house hiring a crackhead as a sales rep.

Was the Paulson call on the spot or what?

I forgot:

Threaten short sellers with regulation.

Make it a crime to think bad thoughts about financials.

spunky, how's that short index position working out for you?

spunky, how's that short index position working out for you?