Loading ...The Feds plan is simple. Over time, like the next decade, they will try to raise rates to at least 5% so the banks can make money. Clearly, the subsidy train is not going to stop with Janet Yellen. The deregulation queen was one of the eager supporters who dismantled the Glass–Steagall act. For those that don’t know, Glass–Steagall legislation is four provisions of the U.S. Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms. This legislation was put in place after the first stock market crash (which caused the great depression) to prevent future market crashes. So history will repeat itself, not a matter of if, just when. […]
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Today is the big day! The market learns if the Fed has decided to begin curtailing its asset purchase program and if so by how much. The telegraphed QE move from the Fed to the market hints yes and it is around 15 billion. (FYI, no big market moving news is dropped by surprise anymore unless it is good news). What the market does not know is how it itself will react. At Alphas Edge, on events like Today, we sit on the sideline all cash. Instead of trying to guess what the Fed will actually do, we react to the reaction. […] Today, with the market set to open slightly higher, is once again focusing on news that affects it. We believe that this push higher is only a head fake. The market is destined to sell off because the good news (Syria temporary resolution) is priced in and bad news (tapering) not so priced in. […] The highlight of last week however came on Saturday. When I say highlight, I mean the truly entertaining and the hilarious. Obama and the clowns on Washington went on a full court press. They desperately tried to convince the Nation that Putin did not win; it was actually Obama who caused the diplomatic solution to Syria by forcing the Syria issue. Can you believe the balls of our politicians? This is like an arsonist taking credit for a fireman putting out the fire. Maybe if Obama and his Arabian friends didn’t arm the Al-Qaida rebels in Syria, we wouldn’t have a bloody war in the first place. […] On Thursday, the markets consolidated after seven straight days of gain. The sell-off was weak but broad based. Commodities in particular got hit hard with metals taking most of the sell pressure. Oil however, did not follow the trend and ended the day 1% higher at $108.65/barrel. The big news yesterday was Twitter’s IPO announcement and talks of Larry Summers as the next Fed Chairman. […] Yesterday the expected happened. The markets had solid gains throughout the day on the back of good economic news from China and the Syria agreement. Traders enjoyed those rare days that all ten sectors finish to the up side. Only three investment types did not perform well; gold, oil and US treasuries. Gold dropped 1.6% to $1364.90 per troy ounce. Oil flopped 2.0% to $107.29 per barrel. Treasuries sold off, which took the benchmark 10-yr yield higher by four basis points to 2.96%. Last night Obama spoke to the nation in regards to Syria. Although he gave what we felt was a compelling argument, the facts why majority of the free world don’t support the war has not changed. The world believes that the Syria war has nothing to do with chemical weapons. It has to do with replacing a non-compliant leader for one that’s compliant, resulting in control of oil and natural gas supplies. US credibility was destroyed when we invaded Iraq the second time. The fact that Obama keeps mentioning North Korea and Iran as we debate Syria only undermines his objective. […] Yesterday was an all-around great day with lots of pleasant surprises and profound ironies. The markets opened like a rocket ship and never looked back. It once again received better than expected economic news from around the world. Traders who had bet on market collapse and war with Syria had extensive losses (our apologies to gloom and doom folks). Traders who had bet the world would act rational over Syria and accepted good economic data cashed in on significant gains. […] Until Syria is resolved, it will remain the top news for the markets. War with Syria means the following; higher oil, higher gold, higher defense company stocks, lower rates, and strengthening US dollar. Note however, strengthening of the dollar only lasts if we are in the winning side. If we are on the losing side, think Weimar Republic. No war results in economic news once again being the driving force for the markets. Okay, okay, I’ll take that last sentence back. I meant random front-running algos will once again be the driving force. […] Yesterday morning the bulls were in control and the US market started the day green. The good feeling did not last long thanks to politicians who were once again trying to rally the nation into war. Clearly, every day Americans, the troops, and nearly everyone else around the world don’t want the United States of America to intervene in Syria. However, a hand full of incompetent, stubborn, half-wit leaders supports this war. […] |
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