In a WSJ piece posted today by the FED‘s media darling Jon Hilsenrath–the leak source of choice–wrote an article criticizing the FED and its reliance on flawed models. Readers of Notes From Underground are well aware that the whole purpose of this blog is to challenge the absoluteness of quantitative models when it comes to global macro trading. The release of Hilsenrath piece just sheds light on a very common theme of mine. The bigger story will be is that the FED‘s new communication policy has placed Janet Yellen as the point person for the most important FED information and the reliance on any FED anointed journalist seems to have come to an end. If the market comes to challenge the FED‘s models, the volatility in 2013 will increase dramatically. Happy New Year and we have much to digest going forward. Also, in conjunction with the Hilsenrath article, here’s a link to the December 13 note.
Posts Tagged ‘Wall Street Journal’
Notes From Underground: Hilsenrath Has Left the Reservation
December 31, 2012Notes From Underground: Dominique Strauss-Kahn Arrested on Rape Charges AND FOR THE FIRST TIME IT’S NOT OF A COUNTRY
May 15, 2011Today’s NOTE‘s headline wrote itself as the history of the IMF and its relationship to stressed emerging markets is replete with acts of “nation violation” in its efforts to ensure that creditors were/are always satisfied–most recent example is Greece. All levity aside, the accusations against DSK have important implications for FRENCH domestic politics as well as the role of the IMF in the current SOVEREIGN DEBT CRISIS plaguing the EU. Last week, the ASSISTANT MANAGING DIRECTOR of the IMF, John Lipsky, announced that he was leaving, thus the leadership of IMF is really going to be in turmoil.
Notes From Underground: Amazing Grace has appeared and it’s in Jackson Hole
August 24, 2010Amazing Grace! How sweet the sound,
That saved a wretch like me.
I once was lost but now am found,
Was blind, but now I see.
The markets are reacting to a Wall Street Journal article by the new FED fair-haired minion, Jon Hilsenrath, and the great dissonance that took place at the last FOMC meeting. Our readers know that we have been very critical of the FED and its reliance on models that, on a good day, are so badly flawed. The pursuit of economic policies based on poor analysis has been a major problem and the markets are waking up to the fact that the FED is neither omniscent nor omnipotent. Today, the markets are responding to the fear that the FED is” lost in the ozone ” so risk is being taken off and the algorithm’s of the risk-off trade are in full motion.