Looking Forward for October 2013
by Jim Welsh, Forward Markets, with David Martin and Jim O'Donnell
Federal Reserve
The Federal Reserve's decision not to reduce their $85 billion of monthly purchases of Treasury bonds and mortgage-backed securities surprised the majority of market participants. In our August commentary we discussed what the Fed might do at their September 17-18 Federal Open Market Committee (FOMC) meeting and noted the following:
What We Read Today 07 October 2013
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list is about the incredible shrinking internet........ and the last article is an update about the possibility of language among the closest relatives to homo sapiens.
Market Commentary: Markets Loose All Gains For Today's Session
Closing Market Commentary For 10-07-2013
Markets went sliding sideways most of the afternoon and suddenly about 3:15 down they went south in a big way falling -0.30% or more.
By 4 pm the indices were back down where the morning lows started out and the aftermarkets were still melting down.
Will Unconventional Policy Be the New Normal?
by John C. Williams, President and chief executive officer of the Federal Reserve Bank of San Francisco
Unconventional monetary policies such as asset purchases and forward policy guidance have given the Federal Reserve much-needed tools when the traditional policy interest rate is near zero. Looking ahead to normal times, certain types of unconventional policies are best kept in reserve. If another situation arises where the Fed needs to call on these tools, it is ready and prepared to do so. The following is adapted from a presentation by the president and CEO of the Federal Reserve Bank of San Francisco to the UC San Diego Economic Roundtable in San Diego, California, on October 3, 2013.
Market Commentary: Markets Slow, Too Slow, Volume Falling
Midday Market Commentary For 10-07-2013
Markets climbed up to the -0.50% level and have more or less stayed there. The small caps seem to be leading the way towards the negative side as volume falls off.
By noon any news from US Congressional leaders was not forth coming and most investors are becoming skittish about where this clash of political differences is going to end up. This could be the quiet before the storm.
Monster Truck Loses Control Runs Over Crowd Kills Seven
At least 7 people were killed and 46 injured after a monster truck ran over spectators during the Extremo Aeroshow in Chihuahua Mexico. Mayor Marco Quezada Martinez said that an investigation had been ordered to look into the incident.
Government Shutdown Day Seventh Day - No Conference Board Employment Index
Econintersect: The government shutdown continues. Today the Conference Board's Employment Index was not issued. There is no end sight, no negotiations, and divisive politics as normal continues.
Market Commentary: Markets Open Down 0.85%, Investors Very Concerned
Opening Market Commentary For 10-07-2013
Big drop in the premarket action when it opened this morning, mostly because Boehner commented over the weekend that a US default is possible if Obama doesn't negotiate over spending.
By 10 am the averages were down -0.80% on heavy volume, but the BTFDers were jumping in buying up all the bargains. However, many investors remain concerned about what the US Congress is going to do about this fiscal mess as many threw in the towel this morning.
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What's News - the Relationship Between Economic News and Asset Prices
by Linda Goldberg - Liberty Street Economics, Federal Reserve Bank of New York
Economic news moves markets. Most analyses find that economic news is incorporated quickly (within minutes) into asset prices, with some measurable persistence of these effects, and with some spillovers across national borders. Some types of announcements-for example, U.S. nonfarm payrolls announcements-generate much larger asset price responses than others.
Killing Me Softly
Written by Glenn Van Lendt
As teenagers, we were always short of cash and when we wanted to get drunk, we bought cheap wine and
Oom Tas(
pronounced Worm Tus, with the 'W' kept silent) was our favourite as it was extremely cheap, readily accessible and seriously unsophisticated. In addition, as
Oom translates to
Uncle in English, we bought it because we felt like we were putting our trust in a relative. Much like Americans put their "trust" in one of their relatives too .... but I think he's called
"Oom Sam".
Why the Fed No Taper Decision is Actually a Tightening
Even with No Fed Taper, Look for Slower Growth in Nominal Transactions
by Paul Kasriel, The Econtrarian
The Fed decided on September 18 to maintain its rate of securities purchases at $85 billion per month rather than reducing or "tapering" the amount of its monthly securities purchases as was, for reasons not entirely clear to me, was widely expected by the financial market
cognoscenti. Many analysts interpreted the Fed's decision not to taper as one of maintaining the same degree of monetary policy accommodation.
Read more >>
Bill Gross: The U.S. Has Become Japan
Econintersect: The bond investing guru at PIMCO (Pacific Investment Management Company) says that low yields will be extant in the U.S. until the 21st century is more than 1/3 over. He points out that the U.S. had a similar period of very low interest rates with high federal debt for 25 years from the early 1940s into the late 1960s. During that era 30-year Treasuries averaged yields of 3%. Gross says the same conditions are holding sway now.
Most Central Banks on Hold Entering October 2013
Monetary Policy Week in Review - Sep 30-Oct 4, 2013: 11 central banks on hold as Fed decision now appears astute
by Peter Nielsen, Central Bank News
Last week 11 central banks kept their policy rates steady while Romania cut its rate for the third time in a row as the U.S. Federal Reserve's surprise decision to delay a tapering of its asset purchases now looks like a very astute and prescient move given the economic fallout from the shutdown of the federal government and growing nervousness over the debt limit.
Documentation for Supreme Court Decisions Has Been Lost
Econintersect: While everyone was worrying about a looming government shutdown, it turns out that it was announced that the Supreme Court of the United States (SCOTUS) already had a big head start on shutting down. In the case of the SCOTUS, recovering operations will not be as simple as just "opening the doors" again. Key records of the court have been lost.
Click on graphic for larger image.
E-Alchemy with the US Fed
Special Report from Bullion Vault
Written by Adrian Ash, Bullion Vault
Imagine the US Fed had a technology called the 'printing press'...
So, like me, the world and its stockbroker thought the US Fed would start trimming QE money-printing a couple of weeks ago.
US Treasury bonds were down, stocks were soft, and gold and silver were long set for a cut to the money-creation scheme, too.
The Fed seemed determined. Ben Bernanke said as much in June. But no.
Insider Trading 04 October 2013: NGL Energy Selling
by Asif Suria
Insider buying decreased with insiders purchasing $40.08 million of their stock last week compared to $69.72 million in the week prior. Selling also decreased with insiders selling $1.08 billion of stock last week compared to $1.32 billion in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 26.96.In other words, insiders sold about 27 times as much stock as they purchased.The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 18.99.
Over 200 Million Twitter Users
by Felix Richter, Statista.com
On the occasion of its upcoming IPO, yesterday Twitter published insights into its financial results. Based on the figures, the short message service currently has 218 million monthly active users, 49 million of these are from the U.S. (22 percent). This corresponds to a year over year growth of around 44 percent. A year earlier, the number of users stood at 151 million.
Infographic of the Day: Battle Royale - FedEx vs. UPS
You may have encountered this dilemma before. In a hurry to ship a package, you suddenly have to make a quick decision between two parcel companies: FedEx and UPS. Which do you choose? If you think they are both the same, think again. Both have their advantages and disadvantages. Check out this infographic on the real difference between these top shippers.
