Tag Archives: FOMC

Optimism Week!

By Admin | Published: September 26, 2011

After several brutal weeks of Risk-Off trading, the markets appear to be set for a week of unstable, but positive (UBP) Risk-On trading. The predominate story emanating from the IMF/WB meetings is the passing of the July 21st EFSF & Greek bailout agreement as well as the potential development of a new structure to increase the leverage of this structure. There has also been newsflow about the potential for the ECB to cut interest rates at their October 6th by 50 basis points.

Also, the calendar sets up well for this UBP Risk-on environment:

Monday: US cloture vote in Senate … …READ MORE

Posted in Front Page | Also tagged , , , , , | Leave a comment

Breaking the financial Hippocratic Oath

By Admin | Published: September 22, 2011

Yesterday, the Federal Open Market Committee met to discuss monetary policy for the United States. For weeks, many strategist/analysts/economists/politicians have questioned the efficacy of the central bank acting to “twist” the yield curve. I’ve written recently (See BU 9.20 and conference calls) that lower interest rates (and job plans) have very little impact due to the balance sheet problem in the country. The transmission mechanism of lower interest rates is broken and not feeding through into the economy. Therefore, any additional action by the Federal Reserve will have little positive impact on the economy and has the downside risk of … …READ MORE

Posted in Front Page | Also tagged , , | Leave a comment

CNBC MIM trade for FOMC

By Admin | Published: September 21, 2011

Last Friday due to breaking news, we dropped my trade structure for today’s FOMC meeting. Here’s the info:

The FOMC meets amidst turmoil in from the European debt crisis and rapidly slowing US economic activity. Expectations are high for action by the central bank due to the calendar change from one day to two days. The market is pricing in a “Twist” operation whereby the bank sells short dated maturities and then use those proceeds to buy longer dated securities from 7 year notes to 30 year bonds. This is likely fully priced into the market with $300 billion the … …READ MORE

Posted in Front Page | Also tagged , | 1 Comment

UK inflation=US Future?

By Admin | Published: May 11, 2011

Today, the Bank of England released their quarterly inflation report and Bank of England governor Mervyn King said that inflation remains “uncomfortably high.” This indicates that the UK central bank will begin to raise interest rates by the end of the year from very low levels of 0.5%. They also have strong upward pressure on wages as permanent salaries are at a 9 month high in April.

Labor costs are normally the biggest drivers of inflation in an industrialized economy and the BOE appears to be seriously behind the curve on this front. The policy problem for the central bank … …READ MORE

Posted in Front Page | Also tagged , | Leave a comment

What to Watch for the Week…and Beyond

By Admin | Published: October 18, 2010

Overnight, the US dollar has had a rally on what I’d call the “We-can-print-money-too!” theory of central bank easing. We had ECB head Claude Trichet refute Bundesbank head Axel Weber’s assertion that the ECB should stop buying bonds. Also, we had two groups (E&Y, CEBR) state that the UK economy will be flat in Q1 2011 and that former policy maker David Blanchflower said, “We (UK) are desperately in danger of a double dip and the last thing you do in a recession is make things worse. The BOE unfortunately looks like the only ‘plan B’ the government has, but … …READ MORE

Posted in Front Page | Also tagged , , , , | Leave a comment

AC/DC Week Ahead

By Admin | Published: October 12, 2010

The week begins with QE2 narrative and will end with the strength of the US consumer. Today, the FOMC releases the minutes from its last meeting and the market is looking for commentary on starting a new quantitative easing program. As I wrote last week, the markets are likely to be disappointed by the program. This shifting may be occurring already with Janet Yellen’s comments yesterday that, “It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system.” KC Fed’s Hoenig is to speak today and you can bet … …READ MORE

Posted in Front Page | Also tagged , , | Leave a comment

It's All About Ben!

By Admin | Published: December 16, 2009

With growth returning and unemployment seemingly peaked, will the FOMC have to exit their massive stimulus. Here are 5 things to ponder for today:

1. A Bernanke Fed has never raised rates in an aggressive manner to combat either inflation or bubbles.

2. Wages are the major factor influencing prices in the United States and Bernanke believes we remain well below levels that will create pressure.

3. Gold and other commodities indicate inflation is a looming problem.

4. Fiscal policy is on a path to a crisis with total debt in the United States growing almost 20% in one year. … …READ MORE

Posted in Front Page | Also tagged , , , | Leave a comment

Ideas and Themes For The Coming Week

By Admin | Published: April 5, 2009

This is a holiday shortened week with Easter looming and most of Christian Europe on holiday from Thursday on…

However, there are some key things happening.

1. Earnings season starts on Tuesday with Alcoa leading it off. Remember, the analysts are expecting overall earnings to be down 36% in the quarter. The focus should be not on the actual earnings, but the outlook/guidance that companies give for the rest of the year. Also, look to see which managements are backing up positive guidance with share buys. Also, consumer credit comes out as well as hope for consumer spending with stimulus … …READ MORE

Posted in Front Page | Also tagged , , | Leave a comment

  • Recent TWEETS @abusch