The ‘Continuum’, AKA NFTRH’s big picture monthly chart of the 30 year yield is now near a limiting point or… a breakthrough to something it has not done for the entirety of the… continuum. The EMA 100 has contained yields over the decades and if it breaks through this time (come on Ben and Janet… taper!) things are going to not be as they have been.
Now can we please start to move along to what come next? Dear Mr. Bernanke and Ms. Yellen… pretty please will you take decisive action? If not literally at this month’s FOMC, would you at least put some language in there?
So here is the playbook folks. ISM is going to be released today at 10:00 US Eastern. If it is strong, as it has been for the last several releases (Surprised? You shouldn’t have been) then there will likely be some ‘taper’ jawbones out again because long term yields already look bullishly constructive. Relentless manufacturing strength would put more upward pressure on yields.
The Fed should just give up on its chronic manipulation and let the ‘organic’ economy be; let it ride. Let the banks take over and ‘carry’ the yield differentials as they become incentivized through higher profit motive to borrow short and lend long.
By Doug Noland
Another week another record high.
“To understand the Great Depression is the Holy Grail of macroeconomics. Not only did the Depression give birth to macroeconomics as a distinct field of study, but also—to an extent that is not always fully appreciated—the experience of the 1930s continues to influence macroeconomists’ beliefs, policy recommendations, and research agendas. And, practicalities aside, finding an explanation for the worldwide economic collapse of the 1930s remains a fascinating intellectual challenge.” Ben. S Bernanke, Essays on the Great Depression, 2000
By Bob Hoye
The following is part of Pivotal Events that was published for our subscribers November 21, 2013.
“The Fed Should be Seeking Redemption”
Signs Of The Times
“Fitch Ratings has downgraded the credit worthiness of Chicago’s bond debt
because of its public pension problems.” – Yahoo, November 11