Stocks Rebound From "Bama Shock", All Eyes On Yellen's Last Rate Hike

After an early slide last night following the stunning news that Doug Jones had defeated Republican Roy Moore in the Alabama special election, becoming the first Democratic senator from Alabama in a quarter century and reducing the GOP's Senate majority to the absolute minimum 51-49, US equity futures have quickly rebounded and are once again in the green with the S&P index set for another record high, as European stocks ease slightly, and Asian stocks gain ahead of today's Fed rate hike and US CPI print.

“The big issue now is whether Republicans will push through their tax bill before Christmas,” said Sue Trinh, head of Asia foreign-exchange strategy at RBC Capital Markets in Hong Kong. “And more broadly, U.S. dollar bulls will be more worried that this marks a Democratic revival into 2018 mid-term Congressional elections.”

The negative sentiment faded quick, however, because according to Bloomberg, despite the loss of a Senate seat, it probably won’t affect the expected vote on business-friendly tax cuts, however, as the winner won’t be certified until late December.

Yet despite the bullish reversal in equities where the BTFD algos quickly arrived, the Bloomberg Dollar Spot Index fell for the first time in eight days after the Jones victory, ending its longest winning streak since January 2016. That said, the market has largely forgotten Alabama by now, and will focus on the Fed’s forward guidance as the central bank is widely expected to raise interest rates on Wednesday, with Treasuries slipping in the London session. The USD Index is just clinging on to the 94.000 marker and paring broad basket losses made in the wake of Alabama’s election result. However, the next major directional move (towards 94.500 or 93.500) will likely come from the FOMC tonight, notwithstanding CPI data after Tuesday’s firmer than forecast PPI readings

Ironically, the narrative that a Democrat won Alabama for the first time in decades is bullish for stocks did not reach Europe on time, and the continent struggled to match Asian gains as investors awaited policy decisions by central banks on the continent and in America. Most European bonds followed Treasuries lower as the dollar retreated. European stocks were fractionally lower (Stoxx 600 -0.1%) with a gain in retail shares, led by U.K. electronics retailer Dixons Carphone Plc, was offset by a drop in food and beverage companies and household goods names. Zara owner Inditex SA is among the best performers on the European gauge after signaling that sales growth is rebounding this quarter after weakening to the slowest pace in more than three years. An earlier technical problem that delayed the opening of all futures and options trading on Eurex, Europe’s largest derivatives market, has been resolved.

Earlier, solid gains in Asia overnight inched MSCI’s 47-country world index up for a fifth day running and while the pre-Fed anticipation meant Europe’s main bourses were barely budged, there was action elsewhere as stocks in Australia, South Korea and Hong Kong rose, while stocks in Tokyo fell. U.S. equities posted fresh all-time highs overnight after data showed signs of inflation in producer prices. Australia's ASX closed +0.1%, kept in a tight range while Japan's Nikkei 225 (-0.5%) was dampened by a firmer JPY, as focus centred on the developments in US which was a blow for President Trump and effectively tightens the passage for tax reforms. Hang Seng (+1.1%) outperformed and Shanghai Comp. (-0.1%) was choppy as liquidity efforts by the PBoC - which injected net funds via reverse repo for a 3rd day - were counterbalanced amid the backdrop of the risk events stateside.

The Alabama vote temporarily seized the spotlight away from the Fed, which will raise rates later by 25bps to between 1.25 and 1.50 percent, its third hike of the year and fifth since the financial crisis. Oppenheimer's Brian Levitt suspects the Fed will also revise up its growth forecast, adding upside risk to the “dot plot” forecasts on interest rates, though he does not expect as many hikes next year as some economists.

“We are going to see a Fed that continues to attempt to tighten policy next year,” he said. “But fortunately with inflation low in the U.S. the Fed has the cover to go slowly... I know people have hopes for the tax cuts (planned by Trump), but I don’t think they will be able to push ahead with 3-4 rate hikes.”

As a result, comments on the outlook for 2018 will be the focus for investors as they weigh the impact of coming policy normalization on global asset prices, while it’s anticipated that the ECB will reveal details of plans to taper asset purchases on Thursday.

Meanwhile, more Brexit drama as UK PM May is being urged by some of her allies to consider the possibility of a cabinet reshuffle in order to build on her recent Brexit success, the FT reports, with the Times adding that the BoE should leave interest rates unchanged this month following November’s historic increase.  Italian PM Gentiloni was on the wires saying that the next Brexit talk phase will be more challenging and called for a tailor-made trade deal between EU and UK. Separately, Labour said it will back Dominic Grieve's amendment giving Parliament a proper say on the Brexit deal if he pushes it to a vote tonight. The terms of our future are not for the government alone to determine, according to the shadow Brexit secretary

Elsewhere in Europe, La Repubblica reported that Italian parties have agreed to hold elections on March 4th.

With the Fed looming, global rates were largely unchanged: the yield on 10-year Treasuries increased one basis point to 2.41%, reaching the highest in almost seven weeks as 10-year Bund yields gained two basis points to 0.33%, the highest in more than a week; Britain’s 10Y Gilt yield climbed one basis point to 1.202%.

In commodity markets, oil was nudging back towards two-year highs hit in the previous session on an unplanned closure of the pipeline that carries the largest volume of North Sea crude oil. Brent crude added 0.8 percent, or 51 cents, to $63.85 a barrel, after shedding 2 percent on Tuesday. U.S. crude added 0.7 percent, or 38 cents, to $57.52, after slipping 1.4 percent overnight. Gold was near its weakest level in almost five months at $1,242.18 an ounce. It is often seen as a safe-haven play and can perform poorly when central bank’s like the Fed feel confident enough to raise interest rates.

Market Snapshot

  • S&P 500 futures up 0.02% to 2,668.25
  • STOXX Europe 600 down 0.1% to 391.17
  • MSCI Asia up 0.3% to 170.33
  • MSCI Asia ex Japan up 0.4% to 553.80
  • Nikkei down 0.5% to 22,758.07
  • Topix down 0.2% to 1,810.84
  • Hang Seng Index up 1.5% to 29,222.10
  • Shanghai Composite up 0.7% to 3,303.04
  • Sensex down 0.7% to 32,999.64
  • Australia S&P/ASX 200 up 0.1% to 6,021.83
  • Kospi up 0.8% to 2,480.55
  • German 10Y yield rose 0.5 bps to 0.319%
  • Euro up 0.08% to $1.1751
  • Brent Futures up 1.5% to $64.28/bbl
  • Italian 10Y yield rose 5.2 bps to 1.443%
  • Spanish 10Y yield rose 2.7 bps to 1.489%
  • Brent Futures up 1.5% to $64.28/bbl
  • Gold spot down 0.2% to $1,242.18
  • U.S. Dollar Index down 0.1% to 93.98

Top News from Bloomberg

  • Democrat Doug Jones delivered an upset defeat to Republican Roy Moore in deep-red Alabama. Jones’s victory cuts the GOP’s Senate majority to just 51-49, which will make it harder for the party to enact its agenda; Moore says Alabama senate election ‘not over’; doesn’t concede
  • Cutting the top individual income tax rate to 37%, setting the corporate tax rate at 21% and capping the mortgage interest deduction at loans of $750,000 or less are among the issues being considered as congressional Republicans consider last-minute revisions to key provisions in tax-overhaul legislation
  • With many believing the a 25 basis point increase in the benchmark federal funds rate is a given, investors will focus on the Fed’s projections for future rate hikes in today’s FOMC meeting
  • The EU warned the U.K. against rowing back on the agreements it made last week as leaders prepare to hand Britain its first reward in the Brexit negotiations
  • China and the U.K. will assess the feasibility of a bond-trading link that would mark a fresh step in opening up the world’s third-largest debt market, according to people familiar with the matter
  • German Social Democrat leader Martin Schulz, who last week secured an endorsement to hold talks with Merkel, has told members the party will explore a “cooperation coalition,” which would include cabinet posts for the SPD but fall short of a traditional government partnership
  • Sentiment among chief financial officers in the U.S. advanced to a 13-year high on optimism surrounding proposed corporate-tax cuts, indicating the economy will continue to make strides next year
  • President Trump plans to make what his staff members called a “closing argument” for tax- overhaul legislation Wednesday as congressional Republicans consider last-minute revisions to key provisions
  • Eurozone industrial output expanded 0.2% m/m in October, beating the estimate for a flat reading
  • Despite a recent bounce back, analysts and investors say the dollar could lose more ground against the euro and yen as the prospect of strong economic growth and tighter monetary policy outside the U.S. more than offsets higher interest rates at home
  • U.K. Prime Minister Theresa May’s flagship Brexit Bill returns to the House of Commons Wednesday for a seventh day of detailed scrutiny. Conservative pro-Europeans want a line in the bill requiring the government to pass full legislation before it attempts to implement any Brexit deal it reaches with the European Union.
  • Secretary of State Rex Tillerson said the U.S. is prepared to negotiate with North Korea without preconditions, but the Trump administration would first want a “quiet period” without nuclear or missile tests for discussions with Kim Jong Un’s regime to begin

Asia equity markets were mostly positive on what was an indecisive trading day with the region cautious throughout most of the session ahead of the looming FOMC and amid the Alabama Senate election results, in which the GOP’s US Senate majority was trimmed to 51-49 seats after Doug Jones won the race to be the state’s first Democratic Senator in 25 years. ASX 200 (+0.1%) was kept in a tight range and Nikkei 225 (-0.5%) was dampened by a firmer JPY, as focus centred on the developments in US which was a blow for President Trump and effectively tightens the passage for tax reforms. Hang Seng (+1.1%) outperformed and Shanghai Comp. (-0.1%) was choppy as liquidity efforts by the PBoC were counterbalanced amid the backdrop of the risk events stateside. Finally, 10yr JGBs were range-bound with early support seen amid weakness in Japanese stocks and after the BoJ Rinban announcement for JPY 960bln in 1yr-10yr JGBs, although this was later pared in 2nd half of trade in which prices returned flat.  PBoC injected CNY 70bln via 7-day reverse repos and CNY 60bln via 28-day reverse repos. PBoC set CNY mid-point at 6.6251. CASS official Yin said Chinese interbank liquidity will remain tight until the Lunar New Year due to wealth management business restrictions and expected Fed hikes, while Yin added the solution to liquidity problems is to lower RRR.

Top Asian News

  • China Is Said to Plan U.K. Bond-Connect Joint Feasibility Study
  • Carlsberg Says It Reaches ‘Understandings’ on Habeco Deal Talks

In Europe, equities trade slightly in the red (Stoxx 600 -0.1%) with little in the way of firm direction with the reduction in the GOP’s Senate majority following Democrat Doug Jones’ victory in Alabama seeing little follow through into European trade. The FSTE MIB (-0.4%) lags its peers amid political concerns after Italian parties have agreed to hold elections on March 4th, subsequently reinvigorating concerns over the rise of anti-establishment sentiment in the nation via the 5Star movement. In terms of sector specific performance, consumer discretionary names are the notable outperformers, bolstered by Spanish heavyweight Inditex which had been up as much as 4% in the wake of their latest earning release. Another relatively tame reaction to UK data, and this time for good (fundamental) reason as the latest labour and wage update is somewhat contradictory. Gilts have slipped to a marginal new Liffe low at 124.63 (13 ticks under yesterday’s close, albeit 23 ticks below best levels seen so far) and the Short Sterling strip has reversed earlier gains of 1 tick and a tad more. However, these losses are far more contained compared to the downside seen in the Eurozone where Bunds appear to have been dragged down by more pronounced selling in peripheral bonds, and especially Italian BTPs on political jitters – president to dissolve Government at the end of the month and elections to be held in early March 2018. The 10 year German benchmark has been down to 162.91 (-36 ticks vs +13 ticks at best), while its Italian peer traded at 138.90 (-85 ticks) and the yield 5+ bp higher pushing the spread to Germany over 4 bp wider. From a tech perspective, Bunds may look towards 162.79-74 next. Elsewhere, US Treasuries are inching lower (through Tuesday’s lows) and the curve is fractionally steeper in typically defensive pre-FOMC fashion.

Top European News

  • U.K. Loses Most Jobs Since 2015 as Labor Market Shows Strain
  • U.K. Minister Hints at Concessions to Tory Rebels: Brexit Update
  • German Social Democrats Weigh Coalition-Lite Tie-Up With Merkel
  • Investec Provides U.K. Fintech With $67 Million for Online Loans

In FX markets, the USD Index is just clinging on to the 94.000 marker and paring broad basket losses made in the wake of Alabama’s election result. However, the next major directional move (towards 94.500 or 93.500) will likely come from the FOMC tonight, notwithstanding CPI data after Tuesday’s firmer than forecast PPI readings. GBP is Holding above lows vs the USD and EUR with GBP not swayed too much by the latest UK jobs report which saw a slightly higher unemployment rate and an unexpected uptick in ex-bonus earnings. Focus for GBP will likely continue to centre on politics with today’s parliamentary vote on the Brexit bill, with the opposition Labour Party affirming that it will side with Tory rebels wanting a say on the divorce deal. AUD continues to outperform (just) after upbeat survey news overnight (Westpac consumer index at 100+ multi-year high and sentiment rebounding to positive territory).

In commodities , energy prices trade modestly higher in the wake of yesterday’s API report which showed a larger than expected drawdown in headline crude stockpiles (-7.382mln vs. Exp. -3.8mln). Elsewhere, spot gold trades with little in the way of notable direction, whilst copper has seen some support from the broadly softer USD during London trade in what was otherwise a relatively subdued session overnight for the complex.

Looking at the day ahead, all eyes will be on the US with the November CPI report due out, and also the conclusion of the two-day FOMC meeting. Fed Chair Yellen will follow with her last press conference. Also of significance is a scheduled discussion between European parliamentarians and European Commission President Juncker and European Council President Tusk around the state of Brexit negotiations. Other data releases include the final November CPI revisions in Germany, October and November employment data in the UK, and October industrial production data for the Euro area. Finally, President Trump may speak on tax reforms today and Germany’s Merkel and SPD will also start formal coalition talks.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 4.7%
  • 8:30am: US CPI MoM, est. 0.4%, prior 0.1%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.2%
  • 8:30am: US CPI YoY, est. 2.2%, prior 2.0%; Ex Food and Energy YoY, est. 1.8%, prior 1.8%
  • 8:30am: Real Avg Weekly Earnings YoY, prior 0.38%;
  • 2pm: FOMC Rate Decision
  • 2:30pm: Yellen Holds Her Final Press Conference Following FOMC Meeting
  • 6pm: Fed’s Brainard Makes Opening Remarks at Awards Ceremony

DB's Jim Reid concludes the overnight wrap

A pretty big day ahead with US CPI and Yellen’s last press conference and the associated latest Fed economic projections (including the dots) overshadowing what is now a near slam dunk US rate hike.

With regards to inflation, the house view is that inflation trends are beginning to firm and should continue in today’s CPI for both headline (0.4% mom vs. 0.1% previously) as well as core (0.2% mom vs. 0.2%). Watch out for those three decimal place numbers which are all in vogue at the moment as inflation holds the key to pretty much everything in 2018. Prints in line with DB forecasts would boost the six-month annualized change in core CPI about 25 bps over October’s number of 1.8%, which would provide further evidence of firming inflation. Staying on inflation the US’s November core PPI (ex food and energy) was above market yesterday at 0.3% mom (vs. 0.2% expected), while the annual increase of 2.4% yoy was in line. Our US economists noted the healthcare component of PPI - which is highly correlated with the healthcare component of the core PCE deflator – rose a solid 0.15% mom. In the UK, the headline November CPI was above expectations at 0.3% mom (vs. 0.2% expected), but the core annual CPI was in line and steady at 2.7% yoy – the highest since 2012. The core PPI was also in line at 2.2% yoy while the closely watched Sweden’s CPI was above market at 1.9% yoy (vs. 1.7% expected).

All this came on a day where Brent futures initially rallied to $65.83 on the previous day’s news of the crack shutting down a North Sea oil pipeline, but then reversed those gains to close 1.31% lower to $63.84/bbl. Elsewhere, the Jan 18 futures on UK natural gas prices jumped as much as 20% following an explosion at an Austrian hub, but closed c11% higher after news that natural gas flows in  Europe are expected to resume soon. So it’s been a big 24 hours for all things price related and with today’s US inflation report, this is set to continue.

As for the FOMC meeting, the main focus will be on the messaging around the outlook for rate increases in 2018 and beyond. Although our economists recently shifted to expecting four rate increases next year, they think it is likely too early for this message to be solidified in a higher median “dot” for 2018. However, they still expect the signal from the meeting to be that with growth
well above potential, the labour market at full employment, record easy financial conditions, rising odds of fiscal stimulus, and early evidence that inflation is recovering, a gradual pace of rate hikes is warranted, and indeed risks have risen somewhat that the Fed could need to move more aggressively. They think this could be reflected in some upward migration in the dots, revisions to growth and unemployment forecasts, and the overall tone from the statement and press conference. The interpretation should be that if the economy remains broadly in line with the Fed’s and DB’s forecasts, tightening once per quarter should continue, with the next rate increase likely in March. Given Mrs Yellen’s history of being a team player and a consensus builder one would imagine her last press conference will not see any surprises left for her successor though.

In the US, momentum on the tax plans appears to be going reasonably well. The House Ways and Means Chairman Brady noted the conference panel could deliver the written agreement on the final tax legislations by Friday, noting “we’re on track for this week”. Looking ahead, the House Majority leader McCarthy told GOP members that the goal is for the House to vote on the reconciled tax bill next Tuesday (19th December), which is also confirmed by Senator Reed of NY, who noted “the time frame of a vote next week is very realistic”. Elsewhere, the final bill is evolving but some of the compromises noted by Washington Post include: i) mortgage deduction limit of $750k, ii) corporate tax rate of 21% and iii) top individual tax rate of 37%. We shall find out the details soon.

Staying in the US, Doug Jones will be the first Democrat to win a Senate seat in Alabama in almost 25 years. With c98% of precincts reporting, the Associated Press projects Jones as the winner with 49.5% of the votes versus 48.8% for the Republican candidate Mr Moore. Mr Jones is scheduled to take office before 3 January, so should not scuttle the tax votes too much if they proceed to plan but it could if delayed to 2018. Once the potential win is confirmed, it will reduce the Republican’s Senate majority to a thin margin of 51-49 (from 52-48) and could impact the prospects of future bills being passed. CNN noted that one in every 20 votes so far this year in the Senate would have had a different outcome if just one vote had flipped to the opposite side.

This morning in Asia, markets are mixed ahead of the upcoming central bank meetings. The Kospi (+0.50%), China's CSI 300 (+0.41%) and Hang Seng (+1.08%) is up modestly, while the Nikkei (-0.55%) is down as we type. Elsewhere, the US dollar index is down 0.2% following the Alabama voting developments while WTI oil is trading c0.7% higher after API data showed US crude stockpiles
dropped for the fourth week.

Now recapping other markets performance from yesterday. US equities broadly rose to fresh highs following further progress on the tax bill, although gains were pared back after Senator Paul tweeted “I cannot in good conscience vote to add more to the already massive $20trn debt”. The S&P (+0.15%) and Dow (+0.49%) both rose modestly while Nasdaq dipped -0.19%. Within the S&P, gains in the telco and financials sector were partly offset by losses from utilities and energy stocks. European markets also trended higher, with Stoxx 600 up +0.66% to the highest in three months – supported by energy and tech stocks. Across the region, key bourses rose c0.5% (DAX +0.46%; FTSE +0.63%) while Spain’s IBEX fell 0.18%. The VIX rose for the first time in six days to 9.92 (+6.2%).

Following the aforementioned UK CPI and US PPI stats, government bonds weakened with core yields up 1-2bp (UST 10yr +1.3bp; Bunds & Gilts +2.1bp), while peripherals underperformed with yields up 4-5bp. Turning to currencies, the US dollar index firmed 0.23%, while Euro and Sterling fell 0.23% and 0.17% respectively. In commodities, precious metals edged c0.2% higher (Gold +0.20%; Silver +0.13%) while other base metals were mixed but also little changed (Copper +0.56%; Zinc +1.11%; Aluminium -0.70%).

Away from the markets and onto Brexit where the rhetoric continues. The EU Chief negotiator Barnier cautioned the UK against reneging on the agreements made last Friday, noting “we will not accept any backtracking from the UK”. Elsewhere, the EU Parliament lawmaker Guy Verhofstadt tweeted that it was time for the UK government to “restore trust” after the “unacceptable remarks” by Brexit Secretary Davis who noted the Brexit deal last week was more of a “statement of intent”. Nonetheless, the draft European Council guidelines seems to suggests trade talks between UK and EU could formally start in March 2018 as it noted “….the EC will continue to follow the (Brexit) negotiations closely and adopt additional guidelines in March 2018, in particular as regards the framework for the future relationship”.

Finally, Australia’s central bank governor Lowe has also added to the debate on Bitcoin. He noted “the current fascination with these currencies feels more like a speculative mania than it has to with their use as an efficient and convenient form of electronic payment”.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November NFIB small business optimism index was above market at 107.5 (vs. 104 expected) – the highest reading since 1983. In the UK, the RPI was slightly below expectations at 0.2% mom (vs. 0.3%) and 3.9% yoy (vs. 4.0%). In Europe, the December ZEW survey on expectations was slightly below the prior month’s reading at 29 (vs. 30.9 previous). In Germany, the ZEW survey on current situations was above market at 89.3 (vs. 88.7 expected) but expectations were a tad below market at 17.4 (vs. 18 expected).

Looking at the day ahead, all eyes will be on the US with the November CPI report due out, and also the conclusion of the two-day FOMC meeting. Fed Chair Yellen will follow with her last press conference. Also of significance is a scheduled discussion between European parliamentarians and European Commission President Juncker and European Council President Tusk around the state of Brexit negotiations. Other data releases include the final November CPI revisions in Germany, October and November employment data in the UK, and October industrial production data for the Euro area. Finally, President Trump may speak on tax reforms today and Germany’s Merkel and SPD will also start formal coalition talks.


Wise Gold Wed, 12/13/2017 - 07:02 Permalink

Were the futures down? I didn't notice.  I just read the two reports that shepwave put out for today.  They have brushed up short term signals.  Shake up coming I think. Intersting calls on gold and oil. 

NoDebt Wed, 12/13/2017 - 07:09 Permalink

Internal Republican conversation last night:  Good job, Mitch, you've almost gotten rid of our majority in the Senate.  Won't be long and we'll be back in the nice, safe minority again where nobody will expect us to do anything.  What about the House?  Oh, that's all lined up for failure in 2018, don't worry, we got that covered.  We'll all be back to making empty promises and raising donations about repeal and replace of Obamacare by next Christmas without having to worry about actually governing any more.  <chuckling> <cognac glasses clinking together>  

FredGSanford. Wed, 12/13/2017 - 07:12 Permalink

Quote from the 1980’s——‘ because of global warming ( it was still called that back then) the polar icecaps will melt and we will be under water by the year 2000 ‘.
Quote by liberal democrats and other such loons

Barack Obama on the night he got elected——- ‘ today the oceans stop rising ‘

That is one of many reasons you do Not vote for a liberal democrat Even if they are running against a man who once made a pass at a 16 year old.

tripletail Wed, 12/13/2017 - 07:22 Permalink

No doubt, election fraud. Not unlike last year's national election --- i.e., Michigan's recount discovered 30% fraudulent voting, with my favorite precinct example yielding 300+ electronic votes vis-a-vis 50 paper votes. Indeed, voting in the US is fraudulent on a massive scale. And there's only one answer to that insanity.

Porous Horace Wed, 12/13/2017 - 07:27 Permalink

During the campaign, the smartest thing Trump said was that the economy is in "a big, fat, ugly bubble." Now, he seems to think that the bubble is the greatest thing since sliced bread. We are so screwed.

moonmac Wed, 12/13/2017 - 07:31 Permalink

One good thing about the Fed's "Wealth Effect" is it made vulnerable minorities who support Socialism and Economic Central Planning even poorer.‎Janet and her crew deserve an award for that aspect. Last thing we need is more Uppity Ass N*ggers strutting around with money in their pockets! 

wmbz Wed, 12/13/2017 - 07:34 Permalink

I'm thinking Jack will up the quarter point.Sort of like cutting a fart just before exiting the elevator, so the blame is left for the next guy.

J J Pettigrew wmbz Wed, 12/13/2017 - 07:51 Permalink

blame?The blame is that unemployment is 2.4% below the point (6.5%) where Bernanke said rates would rates equal to or above inflation.THe Fed is late, slow, and it is going to prove destructive.  Rates should be where Taylor's rule suggests, .... over 2%.The stock market shock of just going back to the levels of ONE YEAR AGO would be catastrophic .......imagine that.....just one year ago....that is frightening...

In reply to by wmbz

shizzledizzle Wed, 12/13/2017 - 07:53 Permalink

Yellen's exit will be like the part in Tommy Boy where Chris Farley nearly rips the door of the GTX and when the door falls off David Spade he exclaims "What did you do!". 

William Dorritt Wed, 12/13/2017 - 08:55 Permalink

Obama and Yellen sitting in a treeTo save the Oligarchs aka bankster class, interest rates were kept at zeroLosersUnion pension plans were robbed blindSavers were robbed blindBond holders were robbed blind WinnersFailed Giant Banks got to keep the fraud going just a little bit longerWall Street has a zero percent interest loans to Banks by the FED fueled stock bubble, ongoing.The housing bubble was kept inflated at 6x ratio of median home to median family income, it was 3x from 1960 until 2000

Batman11 Wed, 12/13/2017 - 11:51 Permalink

Interest rate rises have delayed consequences so we need to wait and see if problems lay ahead. have you forgotten Alan?He’s forgotten the delays in the system.There were delays while the teaser rate mortgages reset; the new mortgage repayments became unpayable; the defaults and other losses accumulated within the system until everything came crashing down in 2008.