Kudos to MMs

Quote from Daal:

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
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Why? The two mandates for the FED is "full" employment and inflation under control. How long do you have to run a low IR experiment to realize that it is not working as far as employment is concerned? To me, it is inflation that is the wild card. I seriously have no idea what the FED thinks inflation is. I have come to a cursory conclusion that prices could be even higher than they are now, but if employment was kept low, they would not deem that [bad] inflation. They are only worried about inflation when it comes from workers driving prices higher, not speculators/the market.

The market is interpreting the statement as no hikes, so is a number of FOMC members, including(in all likelyhood), the Fed chairman
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Yesterday there was quite a bit of activity/volume in the form of hedges in the FFs pit and in the dollar index products. Not all of the "market" believes there is no risk of hawkish moves later today.

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
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Well, that would align with my theory above, that it is inflation caused by employment, and not just high prices that worry him/the FED. If so, then IRs may be at zero for five years with catastrophic effects.

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)
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This all assumes far too much. Inflation as we have seen, can be "good" or "bad", and it is not even clear to me what the guy thinks inflation is with oil at $80, education costs at all time highs, health care costs at all time highs, and just about anything you buy is outrageously expensive to the point where even people with jobs can barely make their paycheck stretch month to month.
 
Look, the all time high in SPX was 1560 ish. Let's round it to 1550 to keep the math simple. We are at ~1150 SPX. That means we are ~400 points from the all time high.

The value of the SPX as I write this is about $12T. You really think that we are ~33%, or another $4T in real value to the value of the SPX in late 2007? Obviously not. In 2007 dollars, we are probably closer to about 900 SPX in those dollar terms.

So what has changed? The dollar we were using to count SPX dollars in 2007 and now must be different. How can that be? Only if the currency was inflated in value. How can that happen if it were not for inflationary forces?
 
Quote from nitro:

Look, the all time high in SPX was 1560 ish. Let's round it to 1550 to keep the math simple. We are at ~1150 SPX. That means we are ~400 points from the all time high.

The value of the SPX as I write this is about $12T. You really think that we are ~33%, or another $4T in real value to the value of the SPX in late 2007? Obviously not. In 2007 dollars, we are probably closer to about 900 SPX in those dollar terms.

So what has changed? The dollar we were using to count SPX dollars in 2007 and now must be different. How can that be? Only if the currency was inflated in value. How can that happen if it were not for inflationary forces?
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Dude, once again you make the mistake of using your theories to create a prediction on fed policy. All the Fed cares about is core inflation(both core CPI and core PCE), employment and inflation expectations, you get these right and you know what they will do. As it currently stands there is just no chance in hell there is a 7% chance of a hike today, i'd say that is as likely as Goldman Sachs firing for bankruptcy by midnight

"How long do you have to run a low IR experiment to realize that it is not working as far as employment is concerned? To me, it is inflation that is the wild card. I seriously have no idea what the FED thinks inflation is. "

Well raising rates certaintly wont help employment, how does raising real interest rates will help an economy during a credit crunch?Take a look at the St louis Fed monetary aggregates. At the end of the day, I'm a trader and I dont care about what I thinks needs to be done, I care about what will be done
 
All the High Frequency (HF) metrics that I have say this is fully valued here. Any higher movement raises the odds of a collapse, imo.
 
Quote from nitro:

All the High Frequency (HF) metrics that I have say this is fully valued here. Any higher movement raises the odds of a collapse, imo.
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Nitro == permabear or rtm-er. You loose in a trending mkt. Loose BIG.
 
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