As the FOMC meets for a 2nd day, they will likely take comfort in what
has occurred since their last meeting where they took the daring move of
deciding to buy treasuries to manipulate the level of longer term
interest rates. After rallying $70 the day of that meeting, gold has
given it all back, the CRB index is unchanged, oil is flat, the S&P’s
are up about 10%, the average 30 yr mortgage rate has fallen to 4.62%
from 4.89%, LIBOR is down to 1.03% from 1.29%, and the KDP high yield
index is down almost 200 bps. The fly is the implied inflation rate in
the 10 yr TIPS which has risen to 1.51% from 1.15% and the 10 yr yield
is still at 3%, although some will argue it would be higher if it wasn’t
for the Fed. If the FOMC doesn’t increase the size of treasury purchases
today, we could rip right thru 3% on the upside. ABC confidence rose to
the highest since early Oct. The MBA said purchases fell to an 8 week
low while refi’s fell to a 6 week low.

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Although the information contained herein has been obtained from sources
Miller Tabak + Co., LLC believes to be reliable, its accuracy and
completeness cannot be guaranteed. This report is for informational
purposes only and under no circumstances is it to be construed as an
offer to sell, or a solicitation to buy, any security. At various times
we may have positions in and effect transactions in securities referred
to herein. Any recommendation contained in this report may not be
appropriate for all investors. Trading options is not suitable for all
investors and involves risk of loss. Although the information contained
in the subject report (not including disclosures contained herein) has
been obtained from sources we believe to be reliable, the accuracy and
completeness of such information and the opinions expressed herein
cannot be guaranteed. An options disclosure document may be obtained
from Mr. Jay Stenberg, Miller Tabak + Co., LLC., 331 Madison Avenue, New
York, NY 10017. Additional information is available upon request.

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