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Stocks Resume Ramp As Old News That Republicans Are Heading To White House, Is Again Regurgitated Late
In a second iteration of news not being read hours ago and suddenly surprising the algos in charge of stock market momentum, minutes ago headlines blasted reports that Boehner would go to a White House meeting. This is precisely what Politico, again, said would happen at 7 am this morning but since apparently nobody bothered to read it, and since it is suddenly news again, everyone is grasping on this "revelation" as if it is a new development. It isn't.
In fact, as Bloomberg adds, the GOP would send a small group of representatives to the White House. It adds: "a meeting is only worthwhile if it is focused on finding a solution,” so House Republicans sending small group of negotiators after entire Republican conference was invited to White House, Brendan Buck, spokesman for House Speaker John Boehner, says in e-mail. BBG adds that Boehner would obviously attend the meeting - what else: he is demanding a negotiation, Obama is giving it to him, will anything come out of it - that is the question, along with elected leadership, and certain committee chairmen. The timing of the meeting is to be announced by White House. Still, since stocks found nothing to be excited by in the FOMC Minutes, they are now grasping on to this particular set of straws, hoping that the GOP will fold ahead of the deadline, and give Obama all he wants. Good luck.
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Fed Minutes is the reason.
They will do the taper and lowering of the threshold to 6% at the same meeting (to avoid "the Catch 22 quagmire").
Shorts took profits after this morning's mini dive. Once everyone figures out that the government is still heading towards temporary default, the downward march will resume.
http://dareconomics.wordpress.com/2013/10/09/around-the-globe-10-09-2013/
I disagree.
There will be the deal and no temporary default. Fed taper will be buffered with lowering of the threshold to 6% (as it was hinted by Evans this morning).
The only reason for the stocks to resume "the downward march" is earnings that I'm afraid will suck this quarter.
Some talks begin ahead of Obama meeting
Washington is finally talking about ways to solve the biggest budget standoff of President Barack Obama’s presidency.
http://www.politico.com/story/2013/10/government-shutdown-house-democrat...
With the quadruple witching in October it's a sure thing they'll print. Just like the other X times now in public and private fashion. Doing a quick look at the trading set of TNA/TZA/VIX, it's looking like the exact same as last 10 times. It's a bear trap and a bull trap.
Inflation does really fucked up things in large numbers when met with compound interest. Easiest if people just cash their chips out of the casino now....and it wouldn't hurt to have some cash on hand either.
Show me the "taper" I see none...
http://www.newyorkfed.org/markets/tot_operation_schedule.html
"a reduction in asset purchases" a.k.a. "taper"
....they may want to share some coffee and donuts but it is only Wednesday. Lew has to make his Armegeddon speech tomorrow and there's at least another weekend to squeeze the shorts so wickedly on Sunday night!
A Female Fed chair?
She was chosen b/c it's harder to criticize females
Guess she was chosen because she´s pretty old. No further job plans. Free to do some really nasty things.
Senior worker, so the statistics say.
They'll have calendars of this eye candy by Xmas was my next guess, you know Sex sells...she's sassy, luscious and capitalized.
A Female Fed chair?
hmmm. yeah. yeah, i guess it is!
anyone else notice?
Looks more like a fuckin Samsquanch to me! Bubbles Fuckin Samsquanch - YouTube
Harder to criticize females? Why would anyone feel that way? She's a fucking idiot and I feel no compunction saying so. Throw off the pc shackles boys. Show me a good person of either gonad variety and I will respect them. Unfortunately rare today.
Miffed;-)
Fixed it for ya.
The frontrunners are mercilessly milking this one.
Another day, another trillion.
Of what though...it's just bits of data awaiting the re-evaluation to zero.
http://dailycaller.com/2013/10/09/white-house-irs-exchanged-confidential-taxpayer-info/
Lets get an impeachment party planned!!!
Wishful thinking, but I'm allowed to day dream sometimes.
Just don't forget to figure out a way to get Biden impeached as well.
What? The Capitol Hill binge drinking festivities are almost over?
Terrible news!
Basically what we have here is the fed tapping on the front bumper and the pm's are sitting there nice and tight like an air bag. Yellen is yelling to Bernank, "hit that mofo harder nigga we aint getting any traction!" BB wheels the sledge hammer back a little further each time...bamm bamm bamm 'are we starting to move yet?" I think it's starting to roll...harder harder.
When they blow the system up the pm's will launch before you can bat an eye.
Doubt they'll be talking about debt ceilings, ACAs, or anything of political relevance.
Weather's nice.....
And there's lots of binge drinking to do yet! Partying with Selma Hayek! What congressman could pass THAT up?
According to Canaccord Genuity:
https://app.box.com/s/vkdglg7m80dvrg0dgn4f
NEGATIVE SPX MOMENTUM SUGGESTS LOW IS NEAR
With the S&P 500 (SPX) trading lower midday, yesterday’s 1.2% loss was not enough to attract buyers. While we continue to believe the intermediate-term uptrend in the SPX remains intact, we feel the current correction could have a bit more to go. The SPX broke below a four-month rising trendline, which makes 1627 the next level of price support we are watching (Figure 1). Short-term momentum has also turned negative. The daily MACD indicator has crossed below centerline and into negative territory, indicating momentum has changed. Although this is generally a bearish signal, we would caution investors about turning negative at current levels. Over the last year, the MACD has crossed below the centerline three prior times, and each instance led to limited downside before an intermediate-term low was in place. The average loss after signal was -2.17% over 7.3 days.
According to CIBC World Markets:
https://app.box.com/s/1hz07yh07pze8p6awmhi
Enter Yellen: What a New Fed Chair Could Mean for Policy
The nomination of Janet Yellen as Fed Chair, to be announced today according to the White House, and likely to be approved early in 2014, does not usher in a new era of more dovish policy for the Fed as some in markets may fear. Yellen’s FOMC voting record has matched Bernanke’s and her speeches have largely echoed the themes of her predecessor. Bonds may see a temporary boost on the appointment of Yellen to the helm (pending Senate confirmation), given her support of the Fed’s overall dovish stance. However, assuming an amicable passing of the current debt ceiling and budgetary deadlock, we see longer-term risks of a sell-off as the drag from fiscal policy eases in 2014, giving even a Yellen-led Fed justification to scale back bond-buying by early next year.
Profile: Vice Chair of the Federal Reserve, formerly Chair of the White House Council of Economic Advisers under Clinton and President of the Federal Reserve Bank of San Francisco.
No Perma-Dove: A look at Yellen’s speeches may lead some to believe that the next Fed Chair is a staunch monetary policy dove. Her emphasis on the destructive nature of long-term unemployment and the cyclical drivers of higher joblessness has highlighted the need for continued easy policy. She has also stated that the Fed’s growing balance sheet is not a roadblock to an eventual smooth exit from QE, and that there is no evidence that asset
purchases are harming financial market functioning. And as Chair the FOMC Subcommittee on Communications, she has been a driving force in formulating tools, including threshold guidance, which have been used to reinforce the Fed’s easing.
But Yellen is no easy-money ideologue. With the Fed facing the greatest downturn since the Great Depression, Yellen’s dovish views and speeches have simply hewn closely to the Fed’s overall dovish stance. A look at her voting record shows votes cast in line with the FOMC majority, including Ben Bernanke, with not a single dovish dissent since the onset of the crisis. Her lack of concern about inflation has been vindicated by the facts, with annual CPI trending below the 2% mark. And she hasn’t always been the voice for more monetary policy accommodation on the Fed. There have been episodes in her career when she has taken a more hawkish tilt, including the May 1996 FOMC meeting where she pointed to the “…need to be nervous about rising inflation”, later that year describing labour markets as “undeniably tight”.
Yellen’s Preferred Employment Indicators: One factor explaining Yellen’s support of the Fed’s easy policy is the continued stagnation in the jobs market. In a March 2013 speech, Janet Yellen identified her preferred indicators for gauging whether there has been a substantial improvement in the labour market outlook justifying a tapering in Quantitative Easing.
- Hiring as a share of employment (Chart 1, left)
- Job quits as a share of employment (Chart 1, right)
- Nonfarm payrolls (Chart 2, left)
- The pace of spending growth (Chart 2, right)
Only the quit rate, which could signal that workers are more optimistic about finding new jobs, has been trending stronger in recent months, with the remaining measures of job market health either flat-lining or softening relative to earlier in the year. So rather than a hawkish/dovish ideological slant, the cold hard fact that the US jobs market has yet to show signs of measurable improvement is likely the key factor motivating Yellen’s support for continued QE bond buying.
For now, fiscal uncertainty continues to cloud the outlook for US economic growth. But if policymakers in Washington are able to extend the debt ceiling and agree on a fiscal deal without new cuts to 2014 spending, an easing fiscal drag could see a 3%-plus pace of US growth next year. That substantial improvement in the outlook for economic activity and hiring could see the Fed begin to scale back the pace of its asset purchases by early 2014, to the surprise of many in markets who may be erroneously expecting more caution from a Yellen-led Fed.
LOL! Good one! Caught me with my mouth open there!
Boner will sell out, he always does.
According to BMO Capital Markets:
Yellen Gets The Nod….Business As Usual
Bottom Line: It should be business as usual under new Chair Janet Yellen in 2014, with the Fed focused on returning the economy to full health. When the time comes to mop up the stimulus, however, we would expect her to be as equally determined to restrain inflation as Bernanke would have been.
The President’s nomination of Vice Chair Janet Yellen as head of the Fed was widely anticipated, and there was only a muted market response. She is widely expected to pass the Senate’s confirmation hearings, allowing her to step into Bernanke’s shoes on February 1. The news removes one source of uncertainty for investors buffeted by the fiscal impasse. Though sporting dovish credentials, Yellen is considered a pragmatic policy maker with an above average record in forecasting the economy. This should come in handy during these particularly uncertain times. Brian Belski, our Chief Investment Strategist, believes the Yellen appointment will be viewed as a seamless transition, one that should provide stability to equity markets.
While Yellen hasn’t spoken publicly about policy in months, it is widely believed she is still a strong supporter of the Fed’s QE program and forward guidance. The unprecedented stimulus is aimed at keeping long-term rates down until the economy strengthens and is closer to full employment, provided that inflation doesn’t rise much above the 2% target. Like Bernanke, her near-term focus is to reduce unemployment. However, this doesn’t preclude slowing asset purchases as the economy strengthens. Assuming the fiscal impasse ends in the next couple of weeks, we still lean towards a December tapering. (Bernanke will chair one more meeting after that on January 28/29.) Still, the Fed is unlikely to stop purchasing assets until next summer and probably won’t begin raising the funds rate until the second half of 2015.
We don’t believe Yellen’s dovish reputation is entirely deserved. She led the push to establish an inflation target in 2011. Her support for aggressive stimulus in recent years was likely warranted by the economy’s lackluster performance since emerging from the Great Recession, and by the equally subdued behavior of inflation. In other words, being “dovish” in the past four years has been the same as being “right”. When the economy eventually normalizes, she will likely refocus her attention on defending both sides of the Fed’s mandate of full employment and low inflation. As a supporter of open communication and transparency, Yellen will need to “lean toward the center” as a leader, to ensure that a solid majority of the other 18 policy makers support her views. This will be especially important when the time is ripe to unwind the unprecedented stimulus, as underscored by the rout in Treasuries ahead of the September meeting amid growing expectations of a mere slowing in stimulus.
Should the fiscal impasse continue and lead to prolonged economic disruptions, the new Chair may consider different tactics to offset the shock. This might include lowering the unemployment rate threshold that would trigger a potential rate hike (currently at 6.5%), or establishing an inflation threshold that would preclude tightening so long as inflation remained below it. Although expanding the size of asset purchases (from the current $85 billion monthly rate) could also be considered, this option seems to be losing favor, even among several Governors on the Federal Open Market Committee who are worried about longer-term risks to inflation and financial stability.
As one of the few policymakers to ring the alarm bells before the 2008 financial crisis, Yellen will likely take the Fed’s expanded regulatory role to heart. The last thing she wants is a credit crisis/asset bubble under her watch.