Ahead of Tomorrow's Fedlines

134
Tue, Oct 28, 2014 - 12:33pm

As the "markets" anxiously await the statement that will come tomorrow at the conclusion on the current FOMC meeting, here are some charts that show what has transpired in the six weeks since the previous FOMC.

The last bit of Fedlines came out following the previous FOMC meeting, which concluded on Wednesday, September 17. Stocks peaked two days later at S&P 2020 before falling nearly 10% over the next three weeks. They've since rebounded to nearly unchanged vs 9/17 levels.

Gold tanked to an early October bounce from 80 support and then rallied in the face of 37,000 new naked Cartel shorts. In the end, just like stocks, gold is nearly unchanged vs 9/17.

But the Big Winner, and the one we should likely be following most closely for clues, is the bond market. Following the last set of Fedlines, the 10-year Note was at 2.62% and The Long Bond was at 3.37%. As of right now, they are 2.28% and 3.05% respectively.

That's a pretty big move in just six weeks and doesn't even include the HUGE drops two weeks ago that were soon retraced. What did Old Mother Fellen say in last month's Fedlines that so spooked and rallied the bond market? I guess it all had to do with "considerable time". (https://www.zerohedge.com/news/2014-09-17/fomc-keeps-considerable-wealth...) Will that specific language remain in tomorrow's Fedlines? Who knows? Who cares?? Can you even believe that gold (and silver) have been reduced to having their daily fiat-conversion value dictated by a few words in a meaningless FOMC Fedline??? What a joke/farce this has all become...

TF

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Motley Fool
Oct 29, 2014 - 5:32pm

Mantis

Guess you have never come across this : https://www.ritholtz.com/blog/2008/10/i-greenspan/

Mantis
Oct 29, 2014 - 5:29pm

Bix Wier

He talks about Greenspan as a 'goodguy' ie plotted to help finally collapse the paper system and return to gold standard, a closet gold bug all along. Quite an interesting idea

Mantis
Oct 29, 2014 - 5:27pm

colloidal silver

On the downside it will turn you blue but the plus is you get super powers

Alonzo Jazzberry
Oct 29, 2014 - 5:23pm

@Motley

Well, a perfect world is a myth! By 'perfect world' I meant one in which assets have no variance, and return their long term average precisely every year.

Long term, as in over the last two hundred years, gold tracks wage inflation (which is generally slightly higher than broad inflation, though sadly not recently) almost perfectly.

Motley Fool
Oct 29, 2014 - 5:19pm

Alonzo

Hahahah. Fair point. :D

Since I have a blog .... five years? much higher, multiples. xD

Ps. I do have to comment that not even in a perfect world need gold be higher. The idea that gold tracks inflation is another goldbug myth. fwiw.

Alonzo Jazzberry
Oct 29, 2014 - 5:16pm

@Motley

You expect Ph. D. economists to make firm, precise predictions about the future of asset prices? They have neither the brains or the competence - you need at least a subscription newsletter or internet blog to have that type of foresight :P

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Motley Fool
Oct 29, 2014 - 5:09pm

Alonzo

So there is. ^^

Gold could be 1 cent higher in five years and his reply would still be accurate.

Bloody Greenspan. xD

Ps. Fwiw, I only posted the correction because you asked. Obviously I was aware of this shortly after it came out.

zman
Oct 29, 2014 - 5:06pm

@AC

"Fed leverage 81:1...A 10 % decline in the stock and bond market make them insolvent"

Please explain how you came up with that assessment? The Fed owns T-bonds and MBS's, they can decline in value, so what?

The Fed can't ever be insolvent, so I wouldn't be waiting for that event to happen.

"How about that strong dollar policy?"

Like it or not, the US dollar is the best of the worst, the Euro is STILL overvalued at 1.26 today and is headed much lower in 2015, the Dollar Index trades at 86 today, don't be surprised to see 95 or 100 next year.

Alonzo Jazzberry
Oct 29, 2014 - 5:02pm

Ah, ok - thanks motley

'measurably' rather than 'multiples'.

I'd say there is a 'measurable' difference between the two :)

Not saying a whole lot there. In a perfect world, gold would *always* be higher in the future as it perfectly tracks inflation. In such a case, gold should be about 16% higher after 5 years (assuming 3% annual inflation).

sierra skierStock_Canines
Oct 29, 2014 - 4:59pm

Submitted by Stock_Canines on

Submitted by Stock_Canines on October 29, 2014 - 11:18am.

To QE to Infinity? I thought that was the dogma around here for quite some time. The concept that the Fed could never end QE was as sure as the sun would shine. I guess not . . .

-------------------------------------------------------------------------------------------------------

QE3 is done, fine. There are many formats of pumping cash into the economy QE1, QE2, QW3, Tarp, Operation Twist, Currency Swaps just to name a few. They haven't quit pumping cash into the economy, they are just doing it in another manner that is easier to hide from the general public.

They may take a short break with 'QE' but they are not done. The heroin addict cannot quit 'cold trukey', it is too painful.

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Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

Key Economic Events Week of 3/2

3/2 9:45 ET Markit Manu PMI
3/2 10:00 ET ISM Manu PMI
3/2 10:00 ET Construction Spending
3/4 8:15 ET ADP employment
3/4 9:45 ET Markit Service PMI
3/4 10:00 ET ISM Services PMI
3/5 8:30 ET Productivity & Unit Labor Costs
3/5 10:00 ET Factory Orders
3/6 8:30 ET BLSBS
3/6 10:00 ET Wholesale Inventories

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