"The Fed is a reluctant Dollar bull," explains Goldman Sachs, noting that Yellen inadvertently revealed the FOMC's expectation that coming policy changes will boost the greenback. Broadly speaking the rest of the sell-side has herded along into the strong US Dollar camp with only Unicredit (rate shift may slow recent very strong USD momentum) and Morgan Stanley (suggesting USD corrective activity) backing away from full dollar bull though most suggest adding to dollar longs on any dip as the most crowded trade in the world gets crowded-er. Then Stan Fischer added... "DOLLAR WON'T KEEP RISING FOREVER."
This week's main event will be the FOMC announcement on Wednesday at 2:00 pm and the subsequent press conference, the conclusion of the March 2-day Fed meeting, in which it is widely expected that Yellen will announce the end of the Fed's "Patience" with an economy in which resurgent waiters and bartenders continue to skew the job market even if it means consistently declining wages for 80% of the US labor force. Here is a summary of what else to expect this week.
Fed to lose patience. Many expected Norway and Switzerland to cut rates. Could they be disappointed?
Must Have Been Wearing Tinfoil Hats ... And Living In Their Mom's Basement
"To make money in the markets, you have to think independently and be humble. You have to be an independent thinker because you can’t make money agreeing with the consensus view, which is already embedded in the price. Yet whenever you’re betting against the consensus, there’s a significant probability you’re going to be wrong, so you have to be humble."
"Today, if you own an asset, say stocks or a home, and it went up in price, you do not perceive it as permanent. You fear it could go back down and you spend none of that money. You are not going to alter your investment decisions or your business decisions. That is why the QE-programs did not work. The goal of the Fed was to push up asset prices. With that in mind, they do not want asset prices to go down because they think it will create a reverse wealth effect. QE has been all about pushing up markets and they are not going to throw that to the wind.... By pushing up asset prices ECB president Draghi is going to make the same mistake as the Fed."
The one thing to note about today's "decisive" jobs number, is that most are scrambling to warn that they really have no idea what it will be due to yet another unprecedented instance of cold weather and snow in the winter (see "Goldman Warns Snow May Leads To Lower Jobs Number, But Snowstorms Will Result In Higher Wages"). The reality is that, based on recent ADP trends and the shale patch reality and recent ISM/PMI surveys, today's NFP should print well below 200,000 (unless some 100,000 bartenders were hired in the deep of winter), not where Wall Street consensus expects it, at 235,000 (on a range of 150K to 370K.
It’s not that long ago, in 2001, that Jim O’Neill, then still with Goldman Sachs, coined the term BRICs, for the fast emerging markets of Brazil, Russia, India and China. O’Neill saw a global power shift from the west to these four nations happening. Fast forward to today, and we see Russia under multiple attacks, including economic ones, from the west, as India just announced the second rate cut this year and China is attempting controlled demolition of the possibly biggest financial bubble in the history of the world. And Brazil? If anything, it’s falling even faster off its pedestal than the other three nations.
"There’s Going To Be Chaos" - What Is The Worst-Case Outcome Of Today's Supreme Court Obamacare HearingSubmitted by Tyler Durden on 03/04/2015 21:18 -0400
Today, for the second time since 2012, the fate of Obamacare lies in the hands of the Supreme Court, and like last time, it will likely be all about Justice John Roberts ' decision. Later today, the US Supreme Court will hear oral arguments in the case of King v. Burwell, the latest challenge to Obamacare, and one that could potentially leave it gutted from an unexpected direction. As a result, nearly eight million Americans could lose their health insurance depending on how the Supreme Court interprets four words in the "Affordable" Care Act.
The average American benefited in no way from the government/banker bailout. Their wages have deteriorated, their daily living expenses have risen, Obamacare has resulted in higher healthcare premiums, higher co-pays, more part-time jobs, less full-time jobs, and less healthcare choices for the working class, while Wall Street generates billions in risk free profits, bankers and corporate executives reap massive million dollar bonuses, and the .1% parties like its 1999. Rising wealth inequality has been systematically programmed into our economic system by bankers and their bought off puppet politicians in Washington D.C. – Corporate fascism at its finest.
American investors might be extremely disappointed with the recent performance of the gold price as the yellow metal is once again trading below $1200/oz. This causes a lot of people to frown, but the reality is that the gold price is actually showing signs of a break-out.
Nothing says limited government and separation of powers like a bureaucracy unaccountable to the voice of the people! Then again, Yellen doesn’t care much for democratic oversight. She’s a caricature of Randian libertarianism: someone who wants to do whatever, whenever, without rulers. The problem is Yellen isn’t operating a private railroad company. She’s the figurehead for a government institution created by Congress. If democracy means anything, it’s that voters have some measure of control over political bureaucracies.
The US dollar firmed at the end of last week. Does this mean the bull market has resumed after the consolidatig its gains in February?