FOMC release. They got to be kidding!

Hello folks,

Just as we were expecting from the Federal Open Market Committee (FOMC) this afternoon, the markets didn't really jump out in joy. Probably the earlier rally had already priced in the expected news and then rapidly sold off to regain part of the losses occurred after 2:30pm.

But what I want to show is what exactly the FOMC reported and how dodgy their reports have become for a while now.
Here are some highlights reported on Bloomberg about their report:

Highlights
The Fed kept policy rates unchanged with the fed funds target rate at a range of zero to 0.25 percent. The Fed kept its language for keeping the target low for some time. The FOMC meeting statement also gave a modest upgrade on the economy.

"The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

It was not dramatic, but the Fed again has upgraded its view of the economy-notably that the labor market is not worsening as much as it has. The Fed expects economic activity to remain weak "for a time."

"Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating."

"Nonetheless, the Fed sees the economy as weak, though growing. Housing is expanding at a moderate rate but is constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit."

"Businesses are still cutting back on fixed investment, though at a slower pace, and remain reluctant to add to payrolls; they continue to make progress in bringing inventory stocks into better alignment with sales. Financial market conditions have become more supportive of economic growth. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability."

Despite market concerns about this week's PPI report, the Fed only minimally addressed inflation concerns, leaving commentary little changed from the last FOMC.

"With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time."

Apparently, the Fed sees the latest inflation numbers as blips-especially since the core CPI for November came in flat-though the Fed offered no comments on this. The FOMC would have reviewed this morning's CPI report prior to voting on the statement.

The FOMC did not change its plans for ending its balance sheet expansion by the end of the first quarter of 2010. But it did remind markets of the existing plan.

"To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010."

Overall, the Fed has left monetary policy unchanged. Balance sheet expansion ends by the first quarter of 2010. The remaining question is when the unwinding begins. The Fed has not addressed that question officially outside of the language that the fed funds rate will remain low for an extended period. But the balance sheet could and likely will start shrinking sooner.


NOW THAT YOU READ THE ABOVE, I EMBOSSED WHERE THE FOMC IS BEING RIDICULOUSLY DODGY.
AND IN RED WHERE THEY TRULY WILL NEVER TELL THE AMERICAN HOW BAD THE SITUATION REALLY IS.
MY GUESS IS THAT EVEN ONCE THE SHOCKING EVIDENCE ON HOW HIGH INFLATION IS GOING TO STRIKE, ON HOW MANY MORE UNEMPLOYED WILL JOIN THE PARTY OF NON REPORTED AND WHEN THE COMMERCIAL REAL ESTATE BUBBLE TOGETHER WITH ALL THE RUBBISH THAT THE TOO BIG TO FAIL BANKS ARE HIDING UNDER THE RUG COMES OUT......OH WELL.....LET'S JUST SAY THAT TODAY IS A NICE DAY.....BEN BERNANKE PERSON OF THE YEAR (TIME MAGAZINE).

WHATEVER..

Demise of the Dollar? Now?

It's been a while since I last posted anything and for that I apologize but I've been in the middle of some major committments and I couldn't postpone them.
Anyhow, I want to make this blog brief and concise.
Where are the world economies going now? We've had the biggest rally in economic history (bear market rally I mean) and we might still well be in the middle of it (the markets don't listen to me....only to themselves). I doubt that this uptrend in all markets will continue that much more. Actually I am quite convinced now that a new nasty downleg might be at the horizon. It all depends on how "they" want to report facts and not fiction.
Over the past months we've heard a handful of nonsense and bogus economic reports on how well and improving all is.
To my total disgust, last week we touched the bottom when economists who report unemployment had missed their target by over 90%. How can that be? I'll tell you how it can be when you have Bernanke looking forward in being reconfirmed and the markets at major crossroads in technical analysis.
Nevertheless, the markets disappointed Washington and did not outperform with those lies.
I guess not all traders are stupid, eh?

The title of this blog tells us that while not even 2 months ago everybody was predicting the end of the usd as we know it and would have signed the beginning of the end of the American Economy.
Now, just after a few days of dollar upswings, might we have seen a yearly low on the USD?
Well, if you check out how bearish the market sentiment has been on the dollar lately I'd have to agree with Robert Prechter who is BIG TIME BULLISH on the dollar now and BIG TIME BEARISH on the markets.
We hit a major resistance line several times on the SPX and failed once again to go north (it has been since late 2007 that is hasn't been broken through). Check it out here below

SP 500 INDEX










Now, check out the USD index and tell me that we're not into some kind of breakout after the recent bottoms.

USD INDEX













To you the final decision to where the markets might be headed soon. But be very careful if your intention is to buy the dips in this case.....it could hurt!

The Feds....what next?

So here we are in late September 2009 with the whole World that seems to be out of the ugly woods of depression. Actually out of recession as well. So says mainstream media.

Now, needless to say that all this hype is extremely overrated, it just looks like right now that we might be headed towards some weird events in the near future.
The Federal Reserve is going to be audited? Will the big guys at Washington allow this to happen?
Ben Bernanke had spoken quite frankly a couple of months ago, under Oath at Congress, stating that Politics should never interfere with Economics and with whom is doing all to save the World! Printing money and ingulfing the press machines apparently is their way to save the World.
Let’s just leave the Feds continue in their masterpiece of changing the World once and for all????
That is what they are doing and they are trying to show us the other side of the coin.
People, you must read between the lines, watch carefully what is shown on tv and realize that everything is changing right before our eyes.
Not even 2 months ago Bernanke (still under Oath) stated that the Federal Reserve was by all means not intentioned to monetize the US debt. And that their purchase of US bonds would have ended this coming October 2009.
Just yesterday at the FMOC meeting they obviously extended their purchasing to March 2010 and at that date (unless some strange events happen in the meantime) they will surely extend their buying even more.
What are they trying to pull? Nothing really. Just that no other buyer is out there for Government bonds, so the Feds are there just hoping to that someday someone else will step in and start believing in the United States of America.

Now we have the FDIC, the Federal Dept. Insurance Company that is literally broke.
Today Georgian Bank went belly up and it shall cost the FDIC almost 1billion dollars. We are getting at 100 banks failed in 2009. Recovery.....ya!
Rumours are now that the FDIC might be looking for borrowing funds from the Big Banks instead of trying to get baled out from the good ‘ol taxpayer.
Who do you think will step in and save the FDIC? Take a nice wild guess.
If I were to gamble on this event I would definitely put all my bets on Goldman Sachs. My thought are that they already started in the past days or weeks to unload their current holdings in stocks since they have already made their big gains in the biggest short-term rally of the Century. Now they might be in need of some cash so......what better time than now to unload and let the market crash or let’s say...help it crash.
Time will tell.....

Good luck everyone.

Itsme

Warren Buffett on economy

Warren Buffett talks about economic recovery during the "Fortune Most Powerful Women Conference."

“The United States economy is now out of the emergency room and appears to be on a slow path to recovery.”
–Warren Buffett, on Sept.15h in a New York Times op-ed. The Berkshire Hathaway (BRKA) CEO writes that while mistakes were made in the recovery effort, a “gusher of federal money” prevented a meltdown. He goes on to caution that “enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects.” If we don’t, the Oracle of Omaha warns us (and Congress): “Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”





Thoughts?

Obama: Jobs will lag until next year

So, we got the words out of Obama.....and for sure he'e being more optimist than we can think.

The new BULL market.

Recession Over. Follow The Cattle

Hi there,

It's me!
It's been a while since I last wrote here.

Oh well.....I've been here all the time though. Reading away...

My question now is: what the heck is goin on?

Over the past 3 months we've been told that we're gettin outta the woods. First it was Dennis Kneale (oh boy!), then came Larry Kudlow, all the boys at CNBC then we got Meredith Whitney upgrading companies such as Goldman Sachs (oh....and by the way...that upgrade came in on a day that the sp500 was basically at a huge potential turning point...no other news than her's came out and the market rallied). Of course if it wasn't for her, most probably some other "paid" pundit would have blown out some other good news to prop things up.

Ok, so at the beginning of March we were on the verge of economic meltdown, in all terms. Nouriel Roubini (the doomer of them all) was quite negative and couldn't see any recovery anytime in 2009. Actually his forecast was 2011/2012 to get out of the woods. And the recovery would have been an L shaped one (apparently now for some reason he changed his mind...not aV shaped as all are expecting but a Ushaped).
Everybody was asking around. Should I short the market. Should I stay out. Should I go look for another job. Are we going to get hyperinflation with all the money poured on the economies all over the world.
In other words we were all pretty much devastated.
Then what? Oh......on march 9th "someone" decided that it was time to invert things. Someone was told that there was no chance at all that the markets could fall lower.
Someone was told that the BAC's the Citigroups, the AIG's ......basically all the bailed out fellows had hit rock bottom and from then on....it was all good.
Someone was told that this was the chance of a LIFETIME.
Now.....let me see here.....
What really happened to justify this massive rally up to today mid september?
Could it have been GDP? Could it have been Unemployment? Could it have been Consumer credit? Or Residential and...Commercial real-estate?
Oh......the USD????? As I speak by the way...we're getting close to 76 (last time it was sept. 22nd '08).
Bernanke and his fellows are screaming to the world that it's all over now?
Investors can be confident once again that the storm is over and put their money at work?

Sometimes, I really think that people don't use their brains. They just do things.....because someone tells them to. And because it's easier or should I say it's a no-brainer demanding to follow the stream. Just like cattle. Ya.....men mostly react nothing more than like cattle.....Or that's what mainstream media wants them to be.
Thank goodness that Internet as of today.....still exsists so we can pass on our message....just like mine here now.....about what is going on.
Last night I saw an Italian tv show here in Canada (it's been a while since I last heard from Italy's Prime Minister Silvio Berlusconi). The only news that we've been receiving from Italy was the whores, prostitutes, private parties, the scandals, the divorces of the most powerful man in Italy.
But last nite I had a chance to hear him in a long interview with Bruno Vespa about the economic crisis and how the US got the whole world out of it.
He said...thanks to all worldwide government interventions (by literally injecting billions of dollars, euros, Yens, Renminbis...whatever) into the economies,over 400 major worldwide banks had been saved.
He went talking about unemployment (which admittedly is still on the rise), but getting "less worse", that the Italian GDP is now growing way better than fellow European Economies. Whatever.
As of today there are increasing public manifestations throughtout the main squares of Italy demonstrating against this unbelievable, or should I say disgusting manipulation that is taking place.
Consumers are not spending. AT ALL! Berlusconi said it too. But he said that consumers are not spending because they are still afraid of a new shock that could hit the markets. And therefore consumers are saving rather than spending. Even though the consumer has more money now since prices have gone down.
He said that banks are still a little tight on credit.....and that he's doing all he can to help the small/medium sized realities out there....that are in desperate need of cash to survive.
But the end line? ALL IS GOOD.

In other words......it really felt to me like listening to Obama, to Geithner, to Bernanke.....
Could it be that those G20's.....G8's.....bildenberg meetings.....they were all setups for one massive mission?
Oh well.....better not go there....but.....
it does seem to me.....call me stupid.......that maybe not today, or tomorrow, or next week, month,....but soon....we're gonna see some weird things happening.
this is not a same 'ol same 'ol warning post that i'm doin.
I just hope that.....we all spread the word...and really open our eyes....and figure out.....where will we be in 1,2,5 years from now. Wherever we might be located in this world...
Go to your local bookstore for example.
When the crisis hit the fan exactly one year ago....in not more than 2/3 months we had tons of books out there explaining what happened....real estate and therefore financial meltdowns and so on.
Last march the markets rebounded violently and ever since....it's been a ride to the sky.
Why is it that there's not ONE book out there that says.....how the US saved the world or how printing money saves economies.
Could it be that all economic books that are history and as we know ..history always repeats itself....one day will have to be rewritten?
The Adam Smiths, the John Mynard Keynes, the John Kenneth Galbraith (author of the great crash of 1929).....are their books goin to be forgotten? Will people laugh at their theories in the near future?
I personally don't think so.....and neither does Bernanke and his fellowship. They KNOW what they're doing. They can't tell the truth. If they do......oh boy....

So people....stay alert....I have to repeat here what I've stated in the past. DON'T LISTEN BLINDLY.
If the worst is really over.....that means I'm a nutcase.....and all I've studied was total BS.....and that I'd be better off flying a kite.......
Actually you know what?...I think I WILL go fly a kite today....since it's still beautiful out there..because the ... so called... dark clouds....are not here yet.

Ciao

Itmse