There is an interesting Story in the New York Times about uncle ben....
It goes on forever but is good, and tells a hell of a long story about central banking. Milton Freedman, and Paul Volcker.
“I think Bernanke is in a very difficult situation. Too many bubbles have been going on for too long. The Fed is not really in control of the situation.”Former Fed Chairman Paul Volcker
I'm still trying to interpret this..... Volcker, has a Thesis that Keynesian economics(which is roughly... in my interpretation That monetary policy has to be manipulated in order to convince business to move to Full Employment)... Volcker's thesis is that Keynesian economics Creates, inflation. And should be used only in special situations. And is more of the Austrian school of economics, that Boom Bust cycles are normal.... and if you are going to manipulate the Bust cycles you have to mitigate the Boom cycles.
3 comments:
Morning,
Everyone is watching Merrill's 4Q earnings and uncle Ben's speech. Some rumor saying that Fed would have an emergency cut before the Jan FOMC meeting in order to kill the bear on the expiration date.
Waht do you think?
Good Morning Melissa,
The inflation numbers(the Bullshit ones that show low inflation) look like we can cut... The dollar looks like we can cut....
I think they will wait till the meeting, unless something goes very bad..
But here I am talking my book.
My trading Thesis would be that there is no reason to stay short waiting for a move from 1370-1330, since we get 30-40 points of volatility every day. I think we may have another low in us... but any good downward move, I'd chase as an exit point..
But as a long term bet Being Net short is a great long term strategy.
The pattern seems to be go short in the morning, go long on the bounce, then sell in the afternoon.
I think that the reason for this is the shorts don't want to risk the rate cut, and are day trading the short position.
I would still say that the only reason for the fed cut is if Lending Stops...
but ben will come out and talk the market off a cliff at every opportunity.
Thanks
I'm dying to know how you are doing......
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