MarketBeat = Blog - WSJ.com : Midday Tidbits: Fed's One-Year Anniversary

WSJ.com=E2=80=99s inside = look at the markets=20

< Gross=20 Warns Subprime Contagion Will Hit [...] -- Previous | SEE ALL POSTS FROM THIS=20 BLOG | Next -- Bear=20 Stearns Eats Its Own Bad Cooking >

June 26, 2007, 1:31 pm

Midday Tidbits: Fed=E2=80=99s One-Year = Anniversary

Posted by Worth Civils

3D[MarketBeat] A few thoughts as the = Fed meeting=20 gets underway, Bl= ackstone=20 falls below its IPO price and Paris Hilton gets out of = jail.

It=E2=80=99s been nearly a year since the Federal = Reserve has raised=20 interest rates, with the latest increase taking place on = June 29,=20 2006. The Fed is meeting again today and tomorrow, but = don=E2=80=99t expect the=20 =E2=80=9Cperma-pause=E2=80=9D to come to an end, says Ed Yardeni, = president of Yardeni=20 Research, who thinks it=E2=80=99s =E2=80=9Ca good bet=E2=80=9D = that policy makers will leave the=20 short-term rate at 5.25%. =E2=80=9CHowever, I am starting to think = about the=20 possibility of a rate cut during the fall. That would be ironic = given that=20 some of the most vocal proponents of the need for easier monetary = policy=20 threw in the towel on a rate cut over the remainder of this year = only a=20 couple of weeks ago,=E2=80=9D Mr. Yardeni wrote in a morning note, = citing Merrill=20 Lynch, Goldman Sachs and Pimco (see=20 post below). =E2=80=9CWhat=E2=80=99s changed? The = latest meltdown in the=20 subprime mortgage market=E2=80=A6suggests that the housing = recession may linger=20 longer.=E2=80=9D=20

The average U.S. mutual fund holds 160 stocks, mostly = for=20 diversification purposes, but most likely, it only needs = around=20 30 or 40 stocks to achieve the desired diversity. =E2=80=9CThe = idea that you need=20 160 stocks to diversify is simply ludicrous,=E2=80=9D according to = James Montier,=20 a contributor to John Mauldin=E2=80=99s =E2=80=9COutside the = Box=E2=80=9D newsletter. =E2=80=9CNow I am=20 not a fan of the use of standard deviation and variance to = describe risk.=20 To me it simply doesn=E2=80=99t capture the way we think about = risk at all.=20 However, once in a while I am forced to use the metrics of = classical=20 finance to show the madness of behavior. This is one such = occasion.=E2=80=9D=20

Shares of Apple=20 are down 2.5% after releasing details on the iPhone=E2=80=99s = service=20 plans ahead of the eagerly awaited cellphone=E2=80=99s = release Friday=20 evening. Roger Kay, president of Endpoint Technologies Associates, = says=20 it=E2=80=99s difficult to add anything to all the hype about the = upcoming iPhone=20 launch, saying that it will be =E2=80=9Cover the top.=E2=80=9D But = he tries, providing=20 this example: =E2=80=9Cright now on eBay, you can buy a domain = name,=20 =E2=80=98Apple-iPhone-Sale.com,=E2=80=99 for $2,999,=E2=80=9D Mr. = Kay tells us. =E2=80=9CA domain name for=20 three thousand bucks. That=E2=80=99s a better business, on a = per-content basis,=20 than even Paris Hilton.=E2=80=9D

Permalink | Trackback URL:=20 = http://blogs.wsj.com/marketbeat/2007/06/26/midday-tidbits-feds-one-year-a= nniversary/trackback/=20

Save & Share: Share on Facebook | Del.icio.us |=20 A = few thoughts as the Fed meeting gets underway, Blackstone falls below = its IPO price and Paris Hilton gets out of jail.
It=E2=80=99s been = nearly a year since the Federal Reserve has raised interest rates, with = the latest increase taking place on June 29, 2006. The Fed is meeting = again today and tomorrow, but don=E2=80=99t expect [=E2=80=A6]

"=20 target=3D_blank>Digg this | Email This | Print=20

Read more: Federal Reserve, Midday Tidbits, Mutual Funds

More related = content

Comments are closed.

Visit WSJ.com's = Markets=20 page 3D"Go

OTHER BLOGS FROM WSJ.COM

WSJ.com\'s law blog focuses on = law and business, and the business of law. Peter Lattman is the lead = writer.')"=20 onmouseout=3Dhideddrivetip() href=3D"http://blogs.wsj.com/law" = ;>Law=20 Blog=20
Washington Wire=20
Real Time Economics offers = exclusive news, analysis and commentary on the economy, Federal Reserve = policy and economics. The Wall Street Journal\'s Greg Ip and Sudeep = Reddy are the lead writers.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/economics" ;>Real=20 Time Economics=20
The=20 Juggle=20
WSJ\'s Health Blog offers news = and insight on health and the business of health. The lead writer is = Jacob Goldstein. Scott Hensley is the editor and a contributor.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/health" ;>Health=20 Blog=20
Energy Roundup collects and = analyzes news in everything from oil to gas, from ethanol to wind power. = It is updated throughout each market day by WSJ.com editors, using = sources from around the world.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/energy" ;>Energy=20 Roundup

MarketBeat, led by Wall Street = Journal Online writer David Gaffen, looks under the hood of Wall Street = each day, finding market-moving news and analyzing interesting trends = and numbers.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/marketbeat"=20 ;>MarketBeat=20
Deal Journal is an = up-to-the-minute take on deals and deal-makers, updated throughout each = market day with exclusive news, analysis, data and more. The Journal\'s = Dana Cimilluca and Dennis Berman are the lead writers.')"=20 onmouseout=3Dhideddrivetip() href=3D"http://blogs.wsj.com/deals" = ;>Deal=20 Journal=20
The=20 Numbers Guy=20
The Wealth Report is a daily = blog focused on the lives and culture of the wealthy, written by the = Journal\'s Robert Frank.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/wealth" ;>The=20 Wealth Report=20
The Informed Reader offers a = survey of insights from media around the world, giving readers a = destination where they can stay abreast of the events, ideas and trends = that shape their lives. The Journal\'s Robin Moroney is the lead = writer.')"=20 onmouseout=3Dhideddrivetip() = href=3D"http://blogs.wsj.com/informedreader"=20 ;>The Informed Reader=20
Business Technology

MARKETS ON THE MOVE

=20

Track = indexes and hot stocks, with roll-over charting and = headlines.=20 Plus, comprehensive coverage of bonds, commodities and forex. = Markets Data=20 Center highlights:
=E2=80=A2 Most=20 Actives
=E2=80=A2 Gainers=20
=E2=80=A2 Losers=20
=E2=80=A2 New=20 Highs and Lows
=E2=80=A2 Money=20 Flows
=E2=80=A2 Intra= day=20 Futures
=E2=80=A2 Curren= cies=20


MOST POPULAR = POSTS

RELATED = ARTICLES AND=20 BLOGS

Related Articles from the Online = Journal

Blog Posts About This = Topic

WEEKLY=20 OUTLOOK: July 16, 2007optionetics.com
NEWS&VIEWS-Articleminyanville.com

ABOUT THIS BLOG

MarketBeat, led by Wall Street Journal Online writer = David=20 Gaffen, looks under the hood of Wall Street each day, finding=20 market-moving news and analyzing interesting trends and numbers. = The blog=20 is updated several times daily with contributions from reporters = at The=20 Wall Street Journal and the Online Journal and includes noteworthy = commentary from the best blogs and research notes. Have a comment? = Write=20 to marketbeat@wsj.com. =

RSS -- subscribe to updated headlines to read from = anywhere on=20 the Web. For more about RSS, click here. =

= MarketBeat Blog

Save & Share

Digg -- submit this item to be shared and voted on by = the digg=20 community. For more about digg, click here. =
Del.icio.us -- mark=20 an item as a favorite to access later or share with the = del.icio.us=20 community. For more about del.icio.us, click here.
Facebook = -- share an=20 item with users of Facebook, a collection of school, company and = regional=20 social networks. For more about Facebook, click here. =

Midday Tidbits: Fed=E2=80=99s One-Year = Anniversary

ABOUT THIS BLOG

Subscribe

Save & Share

PAST POSTS

Top Markets Stories