I'm not betting against the stock market, the Fed will consider their own actions and fiscal policy actions in their forecasts when they consider tightening. 3.5% growth is nice but the new normal is alive and well given that the growth is fueled by constant stimulus
Bernanke interview with FCIC http://c0181567.cdn1.cloudfiles.rac...erview with Ben Bernanke, Federal Reserve.pdf
For old times sake, I was checking on the price of GE options last night. The Dec11s are at .36 vs. probably high 20s for the Dec10s this time last year. The Mar12s are at .25 vs. low 20s for the Mar11s this time last year. For the intrepid among us who see policy on hold a la Japan for a lot longer, the Dec12s can be had for around .10 - a 7X payoff if the Fed stays pat. No positions in rates myself, other than longstanding holding of NLY (still paying off like a rigged slot machine).
Kyle Bass' latest. Almost makes me want to put the family wealth into long dated Fed Funds futures, or buy those eurodollar calls again. We are basically "trapped" in a zero interest rate environment. http://www.scribd.com/doc/48887451/Kyle-Bass-Feb-14
Silva-Jothy closing shop just adds to the list of those skeptical that the Fed could reignite another boom/bust cycle being carried out of the game flat on their backs. Thiel, Shumway, Druckenmiller also come to mind. There have been others. I'm not sure who is left to buy.
Front end is having a monster day, I'm not quite sure why. It appears the the markets were expecting much worse inflation numbers
Rates were lower before the numbers. My guess is that it was from Middle East dustups, Iran sending warships into the Suez, and the Fed printing billions of dollars every single day.
I'm thinking of selling almost 50% of my large Fed Futures bet here, 1st because they rallied a lot quickly, they are on the upper range of where they usually trade at, 2nd because I"m not quite sure the oil/lybia situation is quite supportive of my trade. It could create some kind of stagflation which if it unanchors expectations could lead the Fed to do something, but I'm not even worried about the Fed much, I'm worried that market will worry about the Fed and send the contracts tumbling with phantom rate hike fears
Interesting Fed research http://blogs.ft.com/money-supply/2011/02/21/hometown-bias-on-the-fomc/ Pretty much shows what it was known already, non-voting presidents like to yap away but return to normal once when they have a vote. The note that they tend to speak more hawkish when the data on inflation is bad is also important, it could EASLY be what is going on on the ECB right now and fool a ton of people