These threads started by S2007S are always quite entertaining. It's as if you guys, well most of you, not all, are living on another planet in another galaxy. God I hope for your sake that you are all short term technical traders, and not, for god sake, medium term macro economic based traders. The most entertaining aspects occur when you start criticizing the experts on macro economics and monetary policy. That's when I start spitting coffee. Thank God none of you are in charge of the Fed.
Like the expert, Buffett. Goes long billions in SPX via short 1500-x puts for a decade within days of the high for the next four years. Buys 1500 SPX and watches it fall to 666.
Of course not, don't be ridiculous. Under Greenspan they made a number of minor mistakes, which were revealed after the fact. They also made one gigantic mistake that it is fair to blame on Greenspan. But on the other hand, Greenspan wasn't qualified to lead the Fed, he got his job trough political patronage. Bernanke, Draghi, and Yellen, now, that's an entirely different story. Throw in Soros and Raghuram Rajan, and you have five of the sharpest macro economic minds alive today. I would single Soros out as also having an incredibly deep understanding of human nature and how it effects economies and markets. Since 2009 we have had slow but steady economic improvement, a stock market that's gone steadily up with a few corrections, a recovering housing market, and lower gas prices. From my point of view, the Central Bank working together with Treasury has done a remarkable job of keeping us from total economic collapse and bringing us out of recession. My point would be when are these dire ET predictions due to wild "money printing" going to come true? Where is that hyperinflation? Where is that utterly destroyed U.S. dollar? I'm waiting. I'm still waiting. I guess I'll keep on waiting. _________________________________ I'm going to tell a little secret here. Please don't tell anyone, especially Marc Faber, but QE is NOT "money printing." Oh, I wonder if that could explain why none of those bad things happened that would have happened if it really was money printing.
You are like the premium seller who thinks things are going great until it doesn't. How can you trust the Fed after "subprime contained"? They are clueless. All they know is printing money and it hasn't worked and has had huge unintended consequences (such as the price of oil). I think you'll look back at your comments in the future and think, "Now I know how Jim Cramer felt after his "New World" piece." I guess that is what makes markets.
Go on with your delusion. I have no problem with that, because you choose it of you own free will. What I enjoy most is the many things that are attributed to the Fed. For example the price of oil. Of course, I heard it right out of Marc Faber's mouth. The price of oil dropped to 38$ because the dollar went up. (I'm giving him slightly too much credit here.) And, of course, there is a relationship between the dollar and oil price, but that's not the ONLY relationship! Oh damn, I should have kept that a secret. (I wonder if the world being submerged in a surplus of oil could have anything at all to do with low oil prices. Surely not! It has got to be the 'sky high' dollar. Damn the Fed! Why can't they print just a tiny bit more and cheapen the dollar a little to get my gas prices up to what i'm comfortable with. Do you suppose? Nah, that couldn't possibly be it. Why? Because when the dollar went down, the price of oil went up. And when the dollar went up the price of oil went down. It has got to be the Fed. Damn the Fed!!!) Yes, Virginia, the dollar does affect oil price, but sadly for econ 101 students it is a little more complicated than that.
How insular is US economy and its monetary policy to the current macro issues of the globe? The world has seemed to behave as if the fed will raise rates entire 2015 . Trade is a lower percentage of GDP for the US than it is for commodity exporters and emerging markets. Will the present stress in the global macro space show in US data yet. The fed still needs to see inflation closer to target and a stable improving labor market from what I read lately. I dont think the fed will assign much weight to China PMIs or equities. Does the fed have better info than me. I wonder if they or anyone knows whether China is headed for 5% to -5% GDP. The US has had 3 GDP reports since dollar trend started and all is well so I dont think the fed is overly concerned with the dollars rise. Should the fed worry Bout the IMF, South Korea exports, Bazils corruption and politics, The mystery that is China , liquidity of asset classes. Where would it end? You must admit the fed is loathe to acknowlege "problems" (just read FOMC minutesfrom 2007), especially non US issues. I still think it is US data dependent, Yellin wants to, the data is close, and credibility is on the line. The market(s) will have control if the data is there and they pass. Up to April "unlikely" was the feds message to the markets. "LIVE" is the current message. Hard to come off that wire if they get numbers in line with their general expectations.
I don't think you are thinking about this correctly. The Fed has allowed interest rates to stay artificially low for many many years. This allows people to borrow money at cheap prices to do things such as drill for oil. And many corporations in the USA have done that. And now the Saudis have decided they want to put many of these corporations out of business by lowering the price of oil and so they did. Thus, unintended consequences of the Fed and their monetary policy include the low price of oil. Again, that's why there are markets.