Bernookie taper blunder probably had old Ben perusing his term papers for a memory jogger why he said he'd rain money down in a helicopter in the first place. He repeated the 1935 blunder of raising "taxes" in a Depression. On tapering, only 1/2 the FOMC sees light. Shoulda let the banks go under, shoulda let the market set rates, stimulus heroin has us zonked, hooked, again.
But, even with needle back in place, expect a bobble as irates have barely set down after, as I foretold, discounting a lot more than a ten percent rollback in just buying mortgage paper--Ben will have to INCREASE the morphine drip beyond 80 Bill because of his BS blunder. Oh what a tangled web.....
Meantime be on the lookout for housing to be flacid and retail to be booming, especially at dollar stores where Walmart workers shop. The rest of us go to Walmart.
Date Time (ET) Statistic For Actual Briefing Forecast Market Expects Prior Revised From
Jul 15 8:30 AM Retail Sales Jun - NA NA 0.6% -
Jul 15 8:30 AM Retail Sales ex-auto Jun - NA NA 0.3% -
Jul 15 8:30 AM Empire Manufacturing Jul - NA NA 7.8 -
Jul 15 10:00 AM Business Inventories May - NA NA 0.3% -
Jul 16 8:30 AM CPI Jun - NA NA 0.1% -
Jul 16 8:30 AM Core CPI Jun - NA NA 0.2% -
Jul 16 9:00 AM Net Long-Term TIC Flows May - NA NA -$37.3B -
Jul 16 9:15 AM Industrial Production Jun - NA NA 0.0% -
Jul 16 9:15 AM Capacity Utilization Jun - NA NA 77.6% -
Jul 16 10:00 AM NAHB Housing Market Index Jul - NA NA 52 -
Jul 17 7:00 AM MBA Mortgage Index 07/13 - NA NA -4.0% -
Jul 17 8:30 AM Housing Starts Jun - NA NA 914K -
Jul 17 8:30 AM Building Permits Jun - NA NA 974K -
Jul 17 10:30 AM Crude Inventories 07/13 - NA NA -9.874M -
Jul 17 2:00 PM Fed's Beige Book Jul - NA NA NA -
Jul 18 8:30 AM Initial Claims 07/13 - NA NA 360K -
Jul 18 8:30 AM Continuing Claims 07/06 - NA NA 2977K -
Jul 18 10:00 AM Philadelphia Fed Jul - NA NA 12.5 -
Jul 18 10:00 AM Leading Indicators Jun - NA NA 0.1% -
Jul 18 10:30 AM Natural Gas Inventories 07/13 - NA NA 82
I am floored. Who even reads my drivel let alone comments, one way or another.
I am offering 80 Billion thanks per month, till your interest rate goes down, and your mental acuity is stimulated.
In the meantime, retail came in #$%$ as expected, and the economy looks like it can use more Viagra, since Ben threatened to take the candy away. Some self serving "it's good I announced this hypodermic needle I am going to stab you in the eye with" nonsense last week, which kind of calmed markets, you'll remember for the last three years I have been touting that the market, hearing the end of stimulus or popping of irates, would discount the whole shebang almost overnight, not wait one quarter point at a time.
An ANNOUNCEMENT alone added 25% to the mortgage rate, about $100 a month for every $100,000 borrowed, acts just like a tax, and pulled the wind out of what little sails were filled with air from the other TWO TRILLION already spend keeping irates low. Bond buying at $80B is being defeated, looks like $160B is the next stop--but won't happen.
End of week Bernookie will say "I am glad I was transparent, but looks like a weak economy won't have us tapering much before 2015. Silver will get a pop, but it sure won't do much for the downtrend six months in place and reaching the 50% mark for silver's high. Why? Silver is being crushed by its industrial side, and as long as that is flagging, won't get traction for a while as inflation "officially" appears tame to those that don't count on food clothing or shelter to be in the inflation equation.
After Bernookie bleats 18-19 July, the market will teeter totter in this range, and grab another 12% by Jan 14.
Silver? Without real inflation and real economic growth, not just monetary manipulation, the two pronged sword of inflation and economic recovery is stabbing it in the eye, as adroitly as Bernookie stating bond buying would taper, a full 18-36 months too early.
Don't expect much action till the Wizard of Fed sings Wednesday or Thursday. I think he'll say, "glad I am transparent as a boyscout, numbers aren't that thrilling for GDP, we'll keep pedal to the metal for another 18 months (which means, three years, at least).