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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (14226)	6/25/2013 10:58:25 PM
From: John Pitera	Respond to of 33421

I have watched a couple David Stockman's interviews.... I remember very well when he was President Reagans director of the OMB..... the office of Budget and Management.... and he came out and spoke candidly regarding some of the economic numbers and projections the administration was putting out... He was famously taken by Reagan out to the woodshed and....... given either A) a stern lecture or B) had his behind whipped with a razor strap Zero Hedge produces consistently great output.... I am looking forward to looking at the article... I have to meet with a friend in just a few minutes who is just coming into my neck of the woods. btw... The FED has shown that the Financial Stress Index has been rising....the takeaway is we should be looking for the next new Policy tool to come out of the FED;s Satchel of Magi Solutions. The St. Louis Fed's Financial Stress Index has shot upward in the past few months. Instead of going into the details about how the index is composed, I'll let you click through to the St. Louis Fed's explanation here. The last three times that we've seen spikes like this were during the U.S. financial crisis of 2008, during the acceleration of the Greek crisis in May 2010 and in August 2011, when the U.S. credit rating was downgraded by S&P. The latest stress spike began in the second week of May and has continued unabated. We already know that markets are in turmoil, so this isn't exactly news. But one thing to remember is that the past spikes in the index were swiftly followed by Fed action that relieved the stress. In June 2010, the Fed extended swap lines to central banks around the globe. In August 2011, the Fed announced that rates would remain low for at least two more years. Assuming this isn't a completely spurious correlation, the recent rise in financial stress may mean that we should expect something new from the Federal Reserve soon. —By CNBC's John Carney. Follow him on Twitter @Carney.