The Credit Crisis Financial Stocks Short Journal

http://www.econbrowser.com/archives/2009/09/guest_contribut_3.html

This paper here(Which will probably hit the desks of most FOMC members within hours if its not already there) reaches the conclusion that the 70's inflation was the result of the fed not raising rates due optimistic inflation forecasts instead of responding to actual inflation, also they cut too much during the 70-71 and 74 recessions.
On the surface this looks hawkish but this firms the case that the Fed wont raise rates till they see inflation going up by 5-10 months. The same way that BS forecasts created the 70's great inflation, BS forecasts could create the great deflation of the 2010's, so they will ignore the hawkish lunatics who say inflation will explode and wait for the data
 
You have to believe, with all the press coverage of their losses, that Thiel and Clarium are putting in some kind of bottom right here. I find it interesting that Clarium's supposedly disasterous plays - long Yen, long $, long Treasuries - are all doing just fine for the past few weeks.

FWIW, from Thiel's comments earlier this year, I believe that his dollar long play has mostly been against the GBP, another trade that has turned in his favor over the past month.

For anyone who is listening, something is going on here ... the correlations we have gotten used to - stocks up, treasuries down, yen down, GBP and Euro up - have broken down. A look at the stock market tells us everything is fine. A look at the bond and currency markets tells us trouble is brewing.
 
"The Fed will need courage because I believe we will need to act well before unemployment rates and other measures of resource utilization have returned to acceptable levels" - Charles I. Plosser FOMC voter

Noticed he says acceptable levels, not 'before peaking'. Any voter who wants to raise rates before UR peaks in this cycle where inflation is negative and almost negative in the core, should join the unemployed and be kicked out of the Fed
 
Plosser sounded hawkish, Fisher too. I hope this leads to the May 2010 FF contract to tumble(Maybe the employment will help, hoping for a sub 100k print)Right now the front end is down. I'm hoping for a repeat of the Feb 2010 contract tumbling back in Jun but this time in the May 2010. Talk about free money, if they price in a hike two months after the Fed finished buying mortgage paper in the market(Mar 2010) I will just lol and buy more
 
Have to wonder how much advance knowledge of the employment report the Fed gets. These guys are little more than glorified bureaucrats and they like looking smart as much as the next guy. They wouldn't be talking like this if they knew an ugly employment report was about to be released.
 
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