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Let’s see what the Fed Release does to this rally . . .
The key line is: “Exceptionally low rates for extended periods of time…”
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The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. ~Jesse Livermore
According to the CFTC weekly data for the week ended Tuesday, net shorts in the euro fell by 38% from last week's record high and are now at a 6 week low. Net shorts in the pound moved up a touch to just shy of its record high. Net longs in the Australian$ rose to the most since May '08 and net longs in the Canadian$ rose to the highest since Nov '07. Gold new longs fell to a 4 week low. Net longs in crude rose 14% and are just 12k contracts from a record high dating back to...
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November 4th, 2009 at 2:24 pm
> “Exceptionally low rates for extended periods of time…”
Central bankers in this country have balls the size of shrunken raisins…. I don’t expect this to end nicely. Most likely the market will FORCE rates up eventually, with the Fed kicking and screaming against it.
HCF
November 4th, 2009 at 2:31 pm
Looks like Roubini is right. Idiots in charge; collapse at some point when they cannot sustain the policies any more. Should we just move to Japan?
November 4th, 2009 at 2:34 pm
Actions speak louder than words once again. Fed says they see improvement once again but keeps rates low for “extended periods of time”. Sort of contradictory. Their actions are saying, the economy still sucks.
November 4th, 2009 at 2:52 pm
and of course the moron investors are pushing the market up and up-
November 4th, 2009 at 2:53 pm
Re Mike :
we are in Japan.. Don’t you know that US is a “New World” and every single thing should be “larger, better, stronger”..
November 4th, 2009 at 2:55 pm
CTX: Do they really have a choice at this point? The government is giving away housing money to keep that propped up. Unemployment benefits received yet another extension. Fed keeping rates at zero for god know how long. Dollar keeps falling. But I don’t know if I’d call them “investors”. Seems like traders is more appropriate.
November 4th, 2009 at 2:57 pm
I’m really starting to buy this crazy “dollar collapse” argument. Am I insane? Is Ben really crazy enough to risk this just to prop up all assets?
November 4th, 2009 at 2:58 pm
Harry- Im talking about the retail people watching cnbc and buying- plus of course the wall street mobsters working for the big banks- aka La Wall Street Nostra
November 4th, 2009 at 3:00 pm
Wonder when the treasury purchases will restart. They are collapsing and it will take down what’s left of housing.
November 4th, 2009 at 3:04 pm
the carry (cash into tbtf banks) trade. exceptionally low rates for extended period of time = economy still in the crapper = a good time to buy stocks
November 4th, 2009 at 3:08 pm
agree with Harry, makes one wonder about friday, possibly bad news in unemployment, personally I love the no inflation, i guess they did not read ISM reports, prices paid up 10% that means squeezed margins, you see that copper and oil creeps up everywhere, jeeeze
November 4th, 2009 at 3:09 pm
@ Mannwich
The seeds of the dollar collapse argument were planted long ago when the country got deeply engaged in the war business. War is the mother of taxation, inflation, and loss of freedoms.
The Republicans just won Virginia and New Jersey so it looks like meat will be on the menu again soon.
November 4th, 2009 at 3:10 pm
Translation: Coming this holiday, your Z-I-M-B-A-B-W-E banana republic dollar.
November 4th, 2009 at 3:11 pm
“The Fed Says . . .”
F*ck you savers, seniors and foreigners buying our debt.
November 4th, 2009 at 3:13 pm
@Mike in Nola:
Treasury purchases, i.e., quantitative easing, i.e., doing the monetary circle-jerk, ARE ongoing, because when the Fed buys an MBS from a GSE, as their $1.45 trillion program continues apace, it is the FedGov creating dollars to purchase obligations of itself. It is quantitative easing, i.e., monetizing the debt.
And on the fiscal side:
Nov. 4 (Bloomberg) — The U.S. Senate may approve as early as today a $45 billion plan to expand a tax credit for first- time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies.
The Senate voted 97-1 to end debate on the measure and clear the way for final approval. The Senate is likely to pass the legislation and send it to the House, where Democratic leaders predicted it would be quickly forwarded to President Barack Obama to be signed into law.
The plan would be the first major extension of provisions in February’s stimulus package. The $8,000 homebuyers’ tax credit, slated to expire this month, would continue until April 30 and be expanded to include people with higher incomes and some who already own homes. The credit would cost $10 billion, according to Congress’s Joint Committee on Taxation.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amPE8jkWa4y4&pos=8
November 4th, 2009 at 3:17 pm
SAN FRANCISCO (MarketWatch) — Microsoft Corp., saddled with flagging software sales thanks to the lingering recession, made an additional, unexpected round of job cuts on Wednesday.
Anyone else notice the amount of layoff notices we’re seeing appear to be increasing in the past few days? I guess if expectations for earnings are higher and you’re not increasing revenue, you have to cut more costs. Same old story.
November 4th, 2009 at 3:17 pm
no surprise there with foreclosures ramping every month, and of course you have too extend unemployment again, otherwise, well, prices fall, lol
November 4th, 2009 at 3:20 pm
I have Harry, and at a time normally when they let there folks have some peace of mind for the Holidays, it means one thing and one thing only, budgets suck, thus you axe the employee, u can’t budget when commodities act like yo’ yo’s, states and counties are next,
November 4th, 2009 at 3:23 pm
I was pleasantly surprised the Fed decided to leave rates at zero. I’ve been calling around EVERYWHERE for the last hour to borrow a few bucks. I’ve got all the qualifications of some of the larger banks – bad credit, shoddy assets, blew out trading options in 2003. I mean, what good is .25% APR if they don’t give you a phone number or an application for these offers?
Someone help me out. I need some cheap money to speculate, or are some people not privy to these generous rates?
In other news, the APR on my VISA increased last month.
November 4th, 2009 at 3:24 pm
they should provide the prices they are targeting for S&P500, median house price, and commodities in their release, too.
November 4th, 2009 at 3:26 pm
Think positive guys.
We will all be millionaires soon…. My American dream fulfilled.
November 4th, 2009 at 3:27 pm
is Warren Buffet the Obama Admins best friend?
November 4th, 2009 at 3:31 pm
Speaking of Warren:
http://www.cnbc.com/id/33621425
And Well’s is converting it’s bad loans into interest only. That’s the way to prevent defaults:
http://www.cnbc.com/id/33622884
November 4th, 2009 at 3:46 pm
I think the market just realized we’re in a lose/lose position now.
November 4th, 2009 at 3:46 pm
As Barry would say…. WTF? Just happened! Poof goes the day.
November 4th, 2009 at 3:47 pm
Look at the 10 year…
November 4th, 2009 at 3:50 pm
http://finance.yahoo.com/q?s=%5ETNX
November 4th, 2009 at 3:53 pm
mike in nola, wells article, lol, face it, you’re renting the places out cause no one will buy em, it’s win win, those folks will default everyone knows it
November 4th, 2009 at 3:56 pm
Nothing like watching the markets crap the bed all at once…
HCF
November 4th, 2009 at 3:58 pm
And I bailed on my shorts
Ben had screwed us again, but I think the longs must sense that they are ultimately screwed too.
November 4th, 2009 at 4:01 pm
@Mike: I think we’re all screwed…….well, except for maybe Goldman, of course.
November 4th, 2009 at 4:05 pm
the fed-
a mirage you can believe in
November 4th, 2009 at 4:06 pm
Same as what happened on the previous FOMC announcement. Is Bab Piss-ani calling this “Victory for bulls” ? Because the irrelevant index DOW closed up in +ve ? Note that higher beta Russel 2K is down nearly 1% today.
November 4th, 2009 at 4:07 pm
lol, mike, i almost re-entered my shorts an hour ago, and didn’t cause oil was near it’s high, i expected follow thru on oil tommorrow, portends to a very interesting day friday, dollar had huge volume, biggest in almost a year, fxi gapped up closed at it’s low on the day, copper just will not break k k k
November 4th, 2009 at 4:08 pm
It would appear to me that the “Don’t worry, be happy” scenario put out by the fed is not going down as easy in the treasury markets. There have been a few signs of bottoming, like the GM numbers, some aspects of the housing market, you guys all know what is reported. It appears to me that bond traders are not going to accept the “no inflation forever because we say so” thesis, and I don’t find the reaction of the 10 year bond surprising…
B in T
November 4th, 2009 at 4:18 pm
@ Bruce
I would hardly call a 4-5 basis-point uptick in the 10-year some form of realization. Hasn’t the market seen this before? To me, it seems like another ho-hum business-as-usual, the-Fed-did-exactly-what-was-expected day, which is to say the Fed put nominal equity prices above all other considerations.
I am not saying what the Fed did is right. I am saying I don’t think the bond markets are as annoyed with the Fed as everyone on this blog is.
November 4th, 2009 at 4:21 pm
GS- options
http://finance.yahoo.com/q?s=GSWI.X
Odd action at close.
November 4th, 2009 at 4:46 pm
cnbcs-
i think it was interesting that there was a late day equity sell off- especially after the fed confirmed ZIRP into the distant future-
i.e.- Fed to the world- “it’s ugly”
November 4th, 2009 at 4:52 pm
CNBC headline
“Nervous About US Stocks? Check Out Emerging Markets”
wow- nothing to be newvous about there i guess-
sheeeeesh-
CNBC is the Cosmo of the business world-
one non-stop stupid headline making machine
November 4th, 2009 at 4:53 pm
“The Fed Says . . .”
WTF!! We have given the banks carte blanche and equity markets massive liquidity yet the former won’t lend and the latter sells off.
November 4th, 2009 at 5:05 pm
Thanks, ahab, I saw that too…both equities and T-notes taking a dip. I wasn’t discounting what Bruce was saying so much as restating what I think all of us can agree on: the markets aren’t as smart as the guys (and I do mean guys) on the Ritholtz blog.
After all, the S&P still finished up 10 basis points on the day.
BTW, that piece on Mises on inflation in the 3rd Century Roman Empire was marvelous. I appreciate the heads-up.
November 4th, 2009 at 5:14 pm
Ahab, I concur with CNBCS concurment about the Roman Empire article, thanks for sharing it.
November 4th, 2009 at 5:16 pm
cnbcs-
hat tip actually goes to Wes- i liked it so much i started passing it along-
kind of interesting that all “empires” no matter how far back in time- go through the same stages- and ultimately debase their currency-
hopefully serfdom is not around the corner- but if they come out w/ 100 year inter-generational mortgages so families can afford their upside down homes- then- who knows . . .
November 4th, 2009 at 5:21 pm
ahab, I think we will be lucky if serfdom is all we and our progeny have to worry about…
But, never mind all that. Everybody put your hands together for the coup de grace:
http://www.google.com/hostednews/ap/article/ALeqM5i_J2CDMBIZhobnHhGIYFCzqvR52wD9BOVF6O0
November 4th, 2009 at 5:21 pm
CNBCS:
You are probably right. You would think you’d want an inflation premium if the Fed is going to continue this, but by tomorrow traders will probably be focused more on their navel lint….except maybe Santelli…
B in T
November 4th, 2009 at 5:28 pm
cnbcs-
dude- you already knew that it was a stimulus measure sold as a “green” initiative to increase fuel economy-
colossal scam- which can only mean Clunkers2 is around the corner
420d-
glad you appreciated it- your “mutts” from FF- right?
November 4th, 2009 at 5:29 pm
and no-
i don’t know the difference between your and you’re
November 4th, 2009 at 5:33 pm
CNBC: Well, we all knew that the “better mileage” story was BS. They just wanted to give money to dealers and yahoos.
I guess we have the satisfaction of knowing that those who increased their debt under this program deserved it.
November 4th, 2009 at 5:37 pm
That CFC story bums me out. Mr. Sucks, what is it with you and the whole decadence thing, you know peopleofwalmart- Jeebus, guys making 8/hr giving their hefty hembras 35 clams to get their nails done at the mall- it seems worse than Mad Max, at least those people could wear assless chaps without driving the rest of us into a Lohan spiral…could you lighten up and focus on making fun of us XYers and Misean permabears with a dash of your trademarked smarmy mammarian musings. Thanks.
November 4th, 2009 at 5:38 pm
COMMODITIES I CAN BELIEVE IN.
November 4th, 2009 at 5:50 pm
“The Fed Says . . .” Let Liesman explain it to the peons.
http://www.cnbc.com/id/33621641
Just one problem Stevie–this comes from the same group of ass clowns who has not foreseen any of this shit coming our way. I feel much better…
November 4th, 2009 at 5:55 pm
@ahab 5:29pm — how about to, too, and two? Or one and won? Or who’s and whose? Or principal and principle? Or (my personal favorite) it’s and its?
November 4th, 2009 at 5:58 pm
bergsten-
don’t know the difference between those either
what about nucular and nuclear- hmm . . .
tough one there
November 4th, 2009 at 6:02 pm
I think we have a new winner in Barry’s aforementioned “Dumbest MSM Headline Explaining Daily Market Movement” contest:
http://www.bloomberg.com/apps/news?pid=20601087&sid=anlKeQIz.vz4&pos=2
. . . Drumroll
. . . TaDa:
U.S. Stocks Erase Gain as House Votes to Limit Card Rates
November 4th, 2009 at 6:12 pm
@CNBC S Not only is “War is the mother of taxation, inflation, and loss of freedoms.”, but don’t forget that FDR’s stimuli only pulled unemployment down to about 19% in the 1930s–it was the massive government deficit spending gearing up for WWII that really pulled the US out of the GD. Unfortunately the modern US war machine doesn’t provide that same broad stimulative effect yet exacts the same tool on government debt.
November 4th, 2009 at 6:15 pm
i’d like to congrat ahab too. but what thread is that roman thing on?
November 4th, 2009 at 6:21 pm
MRegan — Bergsten alerted me with an email excitedly reporting that I had “annoyed at least one”, referring to your comment. Irony is sometimes lost on my wholesome helpful worrywart friend, and in any case, since I annoy many people, the occurrence of one singular annoyance is nothing remarkable to The Great CNBC Sucks. Nevertheless, I must profess amusement at your retort, finding it vaguely CNBCSucksesque, sprinked with a few decorative alliterations and spiced with even a bit of Hofferesque vague references. As a Schumpeterian ultrabear, I find your “Misean permabears” the most apt description of the Ritholtz lot. Well done, MRegan, well done!
November 4th, 2009 at 6:27 pm
hue- here is the original post-
http://www.ritholtz.com/blog/2009/09/a-modest-proposal-a-nation-of-bankers/#comment-215567
November 4th, 2009 at 6:38 pm
AWWWW JEEZ. Mr. Sucks……….Did I here/hear/heer that correct MR. Sucks……. Or maybe I did not read/red it right/wright.
But MR. Sucks????????
WOW sorry for all the disrespect in calling ewe/you “TGCNBCS” From now on eye/I will bee/be sure to call you Mr. Sucks……..LOL that is funny…….Mr.Sucks
November 4th, 2009 at 6:45 pm
Like Republican Ritholtz, I have many names: CNBC Sucks, The Great CNBC Sucks, CNBCS, TGCNBCS, The Great One, Mr. Sucks. All of those terms of endearment are fine, but my personal favorite is “The Great”.
November 4th, 2009 at 6:47 pm
awesome ahab, i like this bit the best: “There were about 26 legitimate emperors in this century and only one of them died a natural death. The rest either died in battle or were assassinated, which was totally unprecedented in Roman history — with two exceptions: Nero, a suicide, and Caligula, assassinated earlier.”
we have such short memory in this country. we can’t look back 20 years to Japan. studying roman fiscal policy will be impossible.
Hugh Hendry says that people think the past 30 years were normal, he says when you look back 300 years, the past 30 years were like the blow off top.
November 4th, 2009 at 7:00 pm
Great/Grate?
November 4th, 2009 at 7:05 pm
>> advocatusdiaboli Says:
>> November 4th, 2009 at 6:12 pm
>> @CNBC S Not only is “War is the mother of taxation, inflation, and loss of freedoms.”, but don’t forget that FDR’s stimuli only pulled unemployment down to about 19% in the 1930s–it was the massive government deficit spending gearing up for WWII that really pulled the US out of the GD.
So, it was the government stimulus *after* the government stimulus that pulled us out of the GD? Hmmm… I’m confused.
November 4th, 2009 at 7:11 pm
Ha Mr. Sucks. just noticed the trade of pickups for pickups with debased dollars for clunkers. blink around here, and you can miss some good shiite. i’ll have to steal that too and shout it into the void via the Blue Bird.
November 4th, 2009 at 7:15 pm
a good war will solve our economic problems, speaking for someone who’s too old for the draft. why pay back the Chinese, just take them over, but then we end up with their problem, billions of people looking for work.
November 4th, 2009 at 7:31 pm
>> a good war will solve our economic problems
I prefer death panels and soylent green. Mmm… “yummo”.