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Recession is possible...Really?

Written by A Forex View From Afar on Wednesday, April 02, 2008

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We had a first today, with Mr. Bernanke saying recession is possible. Really? After cutting 300 points, bailing out a bank and making up all sorts of "lending" facilities to switch T-Bonds for empty papers (read MBS) only now it's possibly a recession?

We have been saying it for almost 6 months now, the R word that is, but we were polite in saying Contraction, or Trough. Does this mean we are way ahead of the Fed?

The first step to cure a disease is to admit you have it. Until now, the Fed had taken massive doses of antibiotics, pain relieves and a surgery, and only now the Fed sees the ills, c'mon Guys, take off the Rose Tinted glasses, we can handle it. At least we are starting to walk on the good road, which ultimately will heal.

The other big shift in today's speech was chancing the recovery date. The planned revival of the economy was delayed from Q2-Q3 this year, to 2009. What happened to the quick recovery? Did it hide somewhere?

The way to 1% in Fed Funds is getting paved these days, be patient, any time now.

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Fundies and Trading
There is a constant question from some traders as to why anybody would ever need to consider the ‘F’ word when trading. Fundamentals: what is so damaging at looking at both Technical charts and having a Fundamental filter to gauge how many Lots to put on? Why is it that accepting that Technicals give us price points to trade, but Fundamentals determine the direction that we travel is so difficult for some traders to accept? Without a Fundamental Filter very few pure Technical traders would have seen this Dollar move coming today.

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