These guys are serious about something, but I don’t see how buying toxic assets, keeping treasury returns ultra-low and making sure banks can’t fail fights deflation. I mean, I understand that they are trying to reflate the housing bubble, so that banks don’t go bust, but I don’t get the connection to deflation.

All this means to me is the clowns who bought houses they can’t afford will get to keep them a little longer. I think maybe the Fed’s making these moves under the guise of fighting deflation, but, quite frankly, aside from the drop in gas prices, I don’t see any meaningful evidence of deflation. Have retirement communities cut their fees? Is your doctor charging less? How come milk’s not under $2 a gallon? Will we all get jobs in the mortgage business to pay for our refinanced houses? Maybe the Fed can hire us all as regulators.

One thing I understand that Greenie and Ben never will is that it’s a whole lot easier to maintain price stability than to get it back once you’ve lost it.

“Shapiro was tapped by Obama to head the SEC. Bloomberg hails her as someone who can “overhaul” the SEC. I see her as “more of the same.”

Why? Well, let’s just keep it simple – she’s a top brokerage regulator – a former CFTC head and FINRA CEO. How did Madoff manage to get under her radar, specifically, as CEO of FINRA?

Nor does it stop there. It appears that Shapiro appointed one of Madoff’s sons to a position that oversaw disciplinary actions made by FINRA!

So there you have it. The hand-jobs under the table in politics have certainly not changed with the election of a new President.”

http://market-ticker.denninger.net/archives/693-Bawahahahahaha-Change-Where.html

in re: oil

used to be a real life physical oil trader…the shitty cracks..the huge contango…nothing looks good…however….i’m now a technical trader and I can see the ‘light’ at the end of the tunnel….

sentiment is hugely negative. this is the time of the year for oil to rally. the dollar is going down the toilet. my bias is to get long summer rbob cracks and then get net long oil into the $35 level….we may see $30 oil, but I think we’re setting up for massive rally in oil very soon. Tho’ I must admit I can see some near term downside.

As for crude oil, couldn’t the upward sloping forward curve be regarded as a sentiment indicator? It would seem that the contrary view would be that oil is heading lower. Certainly, if we get a selloff in the SPX (as I am expecting in January), that is likely to pull oil down.

(But yes, there are some weird interrelationships lately between EUR/USD, oil, and treasuries).

Speaking of “rising wedges”, do you have a thought on the chart of the VIX over the last three months?

It seems to be carving out some sort of a triangle. The obvious question is, which way will it break? (I say upward).

excerpt …

“Bizarrely, Bernanke and Co are in fact inviting [treasury] investors to bet the policy will fail, the economy will remain mired in slump for a long period, deflation will occur and interest rates will remain on the floor, as Japan’s have done since the 1990s.”

I want to be long energy. But, like the UGLY stepchild, he’s tough tough to love right now.

- AT

I still think we have weeks of whipsaw coming before we finish this fourth wave, but given the way this thing is struggling near 920, it’s becoming a little troublesome for the bullish view of seeing 1000.

- AT