As the ‘Continuum’ lurks below the red line (monthly EMA 100)…
I noticed that a Fed pumper is out saying ‘Only taper when sure economy on right track‘ (despite the wonderful economic signals coming out of manufacturing, corporate profits and even ‘jobs’, to a degree) but the long bond’s yield could have other ideas.
By Michael Ashton
There is a blog post on the site of the New York Fed might be significant. The title of the post is “Has the Fed Stabilized the Price Level?” In the post, the authors take up the question of price level targeting. This, in itself, is worth noting because the debate about whether the Fed should target the inflation rate (trying to hit 2% on the PCE deflator every year) or the price level (trying to average 2% over the next 10 years, say) has been ebbing and flowing for the last few years but during and after the crisis has generally taken a back seat to more pressing issues like “how can we buy a couple trillion dollars’ worth of Treasury and mortgage-backed securities without impairing market function?” Back at the end of 2010, I wrote a blog post about the fact that price-level targeting is gaining currency (no pun intended) at the Fed.
By James Howard Kunstler
The financial wires and pod-waves are all lit up these days like it was happy hour at the Lottery Winner’s Lounge. It appears that the American economy — capital management division — has found the long-wished-for magic alternative energy source: horseshit. It is fueling the conversation all over the Web and over the senile mainstream media megaphones. One technical analyst, celebrity Tweeter Ralph Acampora of Altaira Wealth Management, actually said this week that the USA would be “energy independent by 2016.” That’s rich. We’d only have to come up with 8.5 million new barrels of oil a day, or give up driving cars altogether.
By Doug Noland
The stock market melt up continues. Meanwhile, intrigue only grows at the Fed.
November 19, 2013: “From NPR News, this is All Things Considered. I’m Robert Siegel. And I’m Melissa Block. Americans are utterly fed up with Washington. That’s the takeaway from the latest round of public opinion polls. Approval ratings for just about every leader and political institution from the president to Congress are now at record lows. NPR’s national political correspondent Mara Liasson reports on why and what the consequences might be. Bill McInturff, the Republican half of The Wall Street Journal/NBC polling team calls it a public opinion shockwave. He’s never seen voters express such disgust at both parties and their leaders. Bill McInturff: ‘October was one of the most consequential months in the last 30 years in American public opinion. And the consequences are all negative. The President’s job approvals hit a new low. His personal approvals turned negative for the first time. Republicans became the first political party with a 50% negative and every person in the Congressional leadership hit new highs in their negatives. No one was spared. America’s fed up and very tired of what happens in Washington.’”
 I can think of a few others (money supply to Corp. profits to S&P 500, GDP to S&P 500, etc.) as you have seen posted repeatedly at Biiwii.com.
By Tom McClellan
November 21, 2013
From an earlier post by Biiwii.com guest Doug Noland:
Senator Dean Heller: “A quick question about quantitative easing: Do you see it causing an equity bubble in today’s stock market?”
Yellen: “I mean, stock prices have risen pretty robustly. But I think that if you look at traditional valuation measures, the kind of things that we monitor, akin to price-equity ratios, you would not see stock prices in territory that suggests bubble-like conditions. When we look at a measure of what’s called the equity risk premium, which is the differential between the expected return on stocks and safe assets like bonds, that premium is not – is somewhat elevated historically, which again suggests valuations that are not in bubble territory.”
Thank you Ms. Yellen for testifying to my point. Equities are not in a bubble by “traditional valuation measures”, just as I have been saying. If you are sincerely and actively bearish the market you had better be bearish because you either think monetary policy is about to fail (i.e. its efficacy is going to wane) or that policy makers are going to be forced to cease and desist, most likely by the Treasury bond market.
By Doug Noland
Yellen fuels the melt up, while the Nikkei’s 7.7% surge is a reminder of the global nature of the market Bubble.
Senator Robert Menendez: “Some commentators have suggested that in addition to managing inflation and promoting full employment, the Fed should also monitor and attempt to fight asset bubbles. Do you think it is a feasible job and something that the Fed should be doing? And if so, how would you go about it?”