These moves were likely either sooner or later, and the FOMC's sorta kinda change of wording was just the accelerant needed. Uncle Buck is taking a break... ...and EUR/USD is…
'Close to the vest' (AKA not leaning too far one way or another, AKA cash) remains the play until the FOMC meeting and its aftermath are cleared. This is because…
Excerpted from the March 15 edition of Notes From the Rabbit Hole, NFTRH 334: As the title suggests I want to talk more and chart a little less this week. …
An important new theme is introduced with respect to the Fed and its unruly subject, Uncle Buck. Lot's of other good stuff too. Subscribe to NFTRH Premium for your 25-35…
So next week the drama will unfold once again on Wednesday as a bunch of interest rate manipulators make a "decision". The 2 year yield has been telling them since…
US Stocks
This headline says it all. Playing its assertion straight, we acknowledge that what was a bubble in asset market supporting policy could morph into a bubble and blow off (i.e. mania) in stocks.
As noted, this site is going to be more technical in nature where we do real work to get the markets right, as opposed to make inflammatory commentary about the…
Everyone expects Janet Yellen to be a rolling over, inflationist stooge just like they did Ben Bernanke. Bernanke came on board after Alan Greenspan had taken the Fed Funds rate up to around 5% if I remember correctly. Inflationists and gold bugs thought they had it in the bag when ‘Helicopter Ben’ assumed control.
Indeed, Bernanke did what he was supposed to do (per the ‘Helicopter ‘Ben’ script) as systemic stresses began to gather in 2007, addressing that pesky Funds rate, culminating in December, 2008’s official ZIRP (zero interest rate policy). Here again is the chart showing the S&P 500’s ‘Hump #3’ attended by this most beneficial monetary policy.
As noted again and again, the much trumpeted ‘taper’ of QE is not only not a negative for the economy, we have made a strong case that its mechanics are actually a positive, in the near term at least. But putting ZIRP on the table would be a whole different ball of wax.
In the current policy and media stoked market environment, anything is possible. It’s the wonderful, magical world of hands-on policy making. 5 years after the financial crisis, but still not enjoying a ramping economy like the good old (and long gone) days of the last great secular bull market (RIP 2000)? Just sit back, relax and let the man in charge control the image.
The media love to get a hold of buzz words and then give them a spin and a life all their own. Recent examples were the mainstream media’s presentation of ‘Operation Twist’ – which was simply an official yield curve manipulation designed to sanitize and dampen inflationary signals – as an inflationary operation, and the ‘Fiscal Cliff’ drama that sent herds of conventional investors to the sidelines* when they should have been contrarian (and bullish) back in Q4, 2012.
The world expects the FOMC to update its expectations regarding a tapering of Treasury bond asset purchases tomorrow. The world thinks that a tapering of these purchases would be bad for gold.
I think a decrease in T bond purchases would be anything from neutral to a potential positive (see post coming later today on the matter). Regardless, it is time to be looking out beyond FOMC with regard to the precious metals, a most sensitive sector to monetary policy.
So here is a check list of what we want to see in order to press the bull stance.
How to play the FOMC? Does it matter beyond "manage risk?" asked the robotic blogger.* The Fed has been using its jawbones as well as talking out of every other…