Kudos to MMs
- Thread starter nitro
- Start date
I don't believe indices are manipulated for the most part. Not that people wouldn't try if they could. I am not making a statement about ethics, I just mean most don't have the muscle. Perhaps during options expiration, but even then it could just seem that way when in fact it was completely logical move on their part.
Now single equities. Pffft. Just about any institution can move GOOG, AMZN, AAPL around $20, $30, $50. Any stock that is loved by institutions and there is very little interest in shorting it, can be manipulated (mostly higher on short squeezes), and imo it is. That's is why imo stocks like GOOG should only be shorted when you think the price is outrageous, then don't short it until it doubles from there and it is getting hammered. Or stay away from it altogether.
FOMC.
Hard to believe that the FED will raise IRs here, but I actually don't think it is zero delta anymore. I am back at about 7% chance.
No one expects the language to change much if at all. It may be a carbon copy of the last statement as far as the market is concerned.
The economy is definitely showing signs of coming back a little bit, but not much from the employment side. It may be that 7% unemployment is the new norm, and the FED can keep rates at zero forever and it may stay at 7%, and they know that as well as anyone does.
Companies are at the point where they have so much cash from the liquidity that has been created, they are raising their dividends en-masse. And yet, there is very little hiring. This to me is an indication that rates are too low for too long.
Imo, rates should be at .25 to .50, or maybe a little higher. It will make zero difference to the employment situation as far as I can see.
Hard to believe that the FED will raise IRs here, but I actually don't think it is zero delta anymore. I am back at about 7% chance.
No one expects the language to change much if at all. It may be a carbon copy of the last statement as far as the market is concerned.
The economy is definitely showing signs of coming back a little bit, but not much from the employment side. It may be that 7% unemployment is the new norm, and the FED can keep rates at zero forever and it may stay at 7%, and they know that as well as anyone does.
Companies are at the point where they have so much cash from the liquidity that has been created, they are raising their dividends en-masse. And yet, there is very little hiring. This to me is an indication that rates are too low for too long.
Imo, rates should be at .25 to .50, or maybe a little higher. It will make zero difference to the employment situation as far as I can see.
When have they said anything like that? The statement is "low for an extended period". Low could mean .50 - .75, and extended period could be six months at this new rate.
Not only that, they could take other actions that effectively tighten, like raise the discount window rate. This probably has closer to a 15% chance of occurring.
You might want to listen to Hoenig interview with Steve Liesman last week or so. The most hawkish member of the fed, explictly said that statement was removing the fed's flexibility in hiking rates, which is why he is dissenting and wants it out
You might want to re-read Bernanke's deflation speech from 2002, where he said its a good idea to promise low rates in the future in order to bring down longer term rates, its not part of the package to hike rates 'a little bit' for no reason. In fact, it would be highly detrimental and make the statement useless(the idea of the statement is to remove uncertainty to bring long rates down, how does hiking out of nowhere is congruent with that?)
I think that is his interpretation of the statement. I doubt anyone at the FED thinks that if they raise .25, that all of a sudden the above statement becomes false. It is not even close to being false if they raised by .75!
I suspect Bernanke has learned quite a bit since 2002, as have we all I hope.
Well, they have to raise by a little bit at some point. Why would it be for a reason then and not now? Don't say the statement, because we already disagree by what it means.
It might not be false from a technical linguistic point of view but it is from a practical view. Its not just Hoenig, Bullard too and a number of others
http://www.bloomberg.com/apps/news?pid=20601068&sid=aFU6r1vdqIb8
The market is interpreting the statement as no hikes, so is a number of FOMC members, including(in all likelyhood), the Fed chairman
Yes, he learned from Ken Rogoff that the aftermath of financial crises tend to be inflationless and jobless for years. He has mentioned familiarity with Rogoff's work under oath in front of congress
Three things. Inflation, resource utilization and inflation expectations. Two out of three are quite below the Fed's range, the other is merely in line with the historical average(Inflations expectations)