Re: Roach's article - I don't think most speculators are ignoring the FED, some are playing a game called "Last Plane out of Shanghai" - object being to carry off the winnings and get out just before the ax comes down. Theory is that rewards go up expotentially toward the end of the game, then go to zero when the ax falls.
This is a bit different than Jay's "last Man Standing" - everyone left playing when the ax falls loses big, everyone who leaves early tends to keep what they have.
Others, like the people buying junk bonds at 150 bp over Treasuries, are trapped by policies, style boxes, and job descriptions written in another age. Many of these people and the funds they run can't really go any where else because the asset allocation was written into a contract.
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The FED was not overly happy with how hard and fast the economy and the market puked in 1993 with the "irrational exuberance"
rate hikes. So maybe they won't go as far or as fast.
To achieve their goal of stopping excess speculation, they might want to stick in a 50 bp rate hike, with guidance that moe are comming - sort of equal amounts bark and bite.
I have a bunch of puts now, on QQQQ, ADBE, EBAY, and a small short of RIMM.
I also have a number of stops under my longs, and I'm ready to sell at the first sign of a storm. |
