Comments on: Notes From Underground: Back To the Sixties–Output Gaps or Phillips Curves?

By: yra

yra — Fri, 21 Sep 2012 14:49:47 +0000

Professor–you are a reason the U of I is a premier institute–I nominate you for the Chicago Fed Presidency

By: kevinwaspi

kevinwaspi — Fri, 21 Sep 2012 13:37:54 +0000

Widow maker indeed! Shorting JGBs, shorting JPY, or fighting the Fed, each makes its own group of widows. With the Woodford Hymnal making the N.Y. Times “Best Seller List”, I fear the academics at central banks will eventually have us all on the widow list. I’m reminded of the old saw, “Markets can remain irrational longer than I can remain solvent.” Academic models will push that irrationality to the limit at the expense of free market discipline everywhere. The Fed may not believe that it can supplant market driven demand, but it continues to act as if it can. Mohamed El-Erian has been using “the new normal” for his description of current events, I’m going to claim the derivative, “the new irrational” and patiently wait for academic hubris to fall flat on its face. As Yra (thank you for the acknowledgement) has observed repeatedly, look to your technicals to guide for stress points, and tread lightly.
Kevin

By: yra

yra — Fri, 21 Sep 2012 12:25:56 +0000

Jerry–the options are not my strength–if we think something is about to break in terms of market action and vol is cheap–ok;but maybe some other readers can opine

By: jerry thoel

jerry thoel — Fri, 21 Sep 2012 11:03:25 +0000

YRA, Thank you as always for sorting thru the clutter to get to the real dynamics at the FED and in Europe.Your blog remains the first thing I read every morning.Buy volatility??and EURO puts???regards,THL