Archive - Sep 17, 2015 - Story

"What do we think the Fed shall do? We’ve not the faintest idea and we openly admit that fact. What the Fed will do and what the Fed should do are two wholly separate issues, for we believe strongly that the Fed should have begun to process of “normalizing” rates two years ago and has erred in not having done so, but at this point perhaps it is prudent to wait one or two or even three more months “just to be sure.” The question is, were we voters on the FOMC what would we do? And the answer is, we’d probably vote to hold rates steady."

While today's economic data is likely too late to influence the Fed's decision which is now due in just over 5 hours, moments ago the latest housing starts and permits data painted another mixed picture, with Starts declining to a three month low of 1,126K, missing expectations of 1160K, and below last month's downward revised 1161K. The miss was a result of housing starts in the Northeast tumbling by 34% to 108K, the lowest prince since March now that the tax-driven surge, which we discussed previously expired in July, is over.

Initial jobless claims fell 11k (on an adjusted basis) to 264k last week - hovering near its lowest level since 1973 as firms hoard labor leaving The Fed stuck between an "everything looks awesome" rock and a "well we have to admit all these indicators are bullshit" hard place...

The long awaited day is finally here by which we, of course, mean the day when nobody has any idea what the Fed will do, the Fed included. Putting today in perspective, there have been just about 700 rate cuts globally in the 3,367 days since the last Fed rate hike on June 29, 2006, while central banks have bought $15 trillion in assets, and vast portions of the world are now in negative interest rate territory.

“Normally when one route gets blocked or more difficult, migrants’ first choice is to return to an old established route. It is likely that some people will look again at the central Mediterranean route from Libya — we can predict a spike there — and people will be working on rival Balkan routes as we speak."

• Wall Street Has Doubts About Fed Lifting Interest Rates (WSJ)
• Global stocks at three-week highs as Fed decision looms (Reuters)
• Charting the Markets: The World Awaits the Fed (BBG)
• Powerful quake off Chile slams waves into coastal towns; eight killed (Reuters)
• As Fed Storm Brews, Europe Stocks Seen Weathering Turmoil Best (BBG)
• Fiorina's rise adds another insurgent to U.S. election fray (Reuters)