Art -
OK here's my prediction for the 2.00pm announcement that 'someone' has been telegraphing for days ever since the realization that the last stick with wich to whack the market, namely the last set of CPI numbers came in with no sign of inflation:-
The announcement will be designed to :-
1. Give the market a little whack today with the expected small rate rise.
2. In order to keep the investors scared stiff a week or so before a great earnings saeson the Fed will keep the 'tightening bias' on. What on earth is a 'tightening bias' anyway. Its just another stick with which to whack the market.
3. In order to really make sure that all the joy of this great earnings season is still born they will issue comments to the effect that we had all better watch out at the next meeting of the FOMC or maybe even before should they see any sign of inflation and the ususal "we will not hesitate to act as necessary at the first sign of recurrent or resurgent inflation'. To all the World as if we were back in the early 70's with rampant inflation.
This they hope will be sure to keep all the comentators and talking heads rabbiting on about non existent inflation for another three months completely ignoring corporate performance. Well they would say the P/E's are already high enough to accomodate ANY betterment in corporate performance.
Thenthey wil lgo home satisfied that they have prevented the market from 'overheating' which is after all in the absence of inflation their main concern since they are absolutely sure that it is 'too high'.
The next few weeks are going to be full of 'bias' , 'Beige Books', Polls of Consumer Confidence', new home sales, old home sales, auto sales, the number of babies being born, the number of men on Viagra, the number of people eating Cheerios, the spending habits of the Man in the Moon, the effect of the Eclipse as it affects the economy, the effect of the Eclipse in two years time all of these just to find any evidence, I mean any , a sniff, a slight taste, a tiny sound, a smidgen, a Quark's worth or the non-existent subsatance known as inflation.
Hope I'm wrong.
Best regards,
L |
