Posts Tagged ‘regulation’

Notes From Underground: The Day Is Upon Us … Be Patient and Don’t Act With “Water-Like Impetuosity”

December 17, 2013

Tread lightly into the throes of Fedspeak for first comes the FOMC statement a 1 p.m. CST followed by the last press conference of Chairman Bernanke’s term at 1:30 p.m. The markets are going to be volatile as confusion reigns in all asset classes. Today, the Treasury market was trying to reassert a steepening bias into the 5/30 yield curve as the FIVES were strong and the 30-YEAR YIELDS were rising. However, by day’s end the 5/30 retraced and closed unchanged on the day (if you trade the curve in futures terms the ratio is almost three FIVES to one THIRTY-year bond). Consensus has changed and the bias is for a tapering the question is: HOW LARGE? I have assumed a $20 billion tapering and I will stick with that “bold” conjecture. It is important to listen for any language of forward guidance on the unemployment threshold for if the Fed were to hint at lowering the 6.5% threshold, markets will reverse course, especially the S&Ps and DOW, which have spent the last few days in correction mode.

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Notes From Underground: One More Issue Resolved … Chancellor Merkel Prevails

September 23, 2013

The German election results were pretty much as polls predicted, although the CDU/CSU party of Angela Merkel ran stronger than polls suggested and the FDP, Merkel’s present coalition partner ran similar to last week’s Bavarian State votes, and is forced out of government as it failed to reach the necessary 5% threshold. The FDP failed to receive as many votes as the UPSTART Alternative for Germany (AfD), which just missed the 5% criterion and thus will have no votes in the Parliament. Chancellor Merkel has not yet formed a governing coalition as she still needs five votes to secure a parliamentary majority. The EURO performed in a very stable fashion as the news reflected the status quo. The market is still busy digesting the news from the FED‘s non-tapering announcement, which has put more turmoil than stability into the financial markets. The U.S. equity markets, using the S&Ps as my measure, closed below the low made on September 17 before the FOMC surprise statement. (NOTE: I am using a continuation chart for this picture). The FED‘s “Wednesday Surprise” has left the market wondering what the FED sees that kept it from beginning a tapering of its LARGE SCALE ASSET PURCHASES, or QE by another name. It may well be that the FED doesn’t see any problems but just being cautious in response to recent weaker data.

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Notes From Underground: Peeking at FOMC Expectations (CNBC)

September 17, 2013

yra9-17-tiff

Click on image to watch Rick and I discuss the expectations for tomorrow’s FOMC announcement.