Rate cuts keep giving traders that safety net

Rates were cut yet again in an effort to jump-start the economy. By both the Federal Reserve and some of the Central Banks.
I have to admit that while it’s definitely unheard of usually, but on the flip side, it just guarantees that everyone will just look out for cuts and try to predict the outcomes. Which is why the markets go up on the “prediction” news and down when they want more to happen.
If given enough times, we’ll just keep expecting federal bailouts and help. It’s like a grownup, asking help from mommy and daddy. Sure in the time of crisis, your parents are there to help but when all things are said and done, Wall Street is a big boy. They can handle it themselves.

Now, Bernanke’s message may have less power because traders already anticipated for weeks that policy makers would need to make that move, and because of rising concern even rate cuts may do little to immediately help banks scrambling to reduce their vulnerability to loan losses.

Interesting isn’t it? Seems like traders expect the bailouts, and expect rate cuts. And when it comes to the stock market? There shouldn’t be that sort of safety. It is after all a bull or bear market. Not one that’s like a greedy little piglet.
Photo Credit: (epicharmus)