Home > Uncategorized > 2012/08/30: Quick Post: Pre-Jackson Hole Fresh Tech Now Available

2012/08/30: Quick Post: Pre-Jackson Hole Fresh Tech Now Available

© 2012 ROHR International, Inc. All International rights reserved.

Technical Projections and Select Comments are already available via the link in the right hand column. The Summary Perspective on Key Influences and Weekly Reports & Events Calendar are also already posted, and we hope you find those useful as well.

Of course, the overriding (some would say ‘overbearing’) presence of the Kansas City Fed Jackson Hole Symposium tomorrow has kept the markets mostly on hold until today (Thursday.) It seems the equities are finally started to grasp the idea that Sugar Daddy Ben might not have any more candy to dispense as early as tomorrow. “We have steps we can take if conditions deteriorate” options are really not quite the same as the immediate sugar rush.

So while the “To QE or not to QE…” deliberation leaves quite a few folks with a strong feeling “that is the question”…

 

 

…as regular readers know, we think that even any actual QE is so much falderal regarding actual assistance for the real economy. Yet it must still be watched closely for the potential ‘knee jerk” impact on the near term trend; such as a temporary boost it might provide equities and commodities, and pressure it brings onto the core government bonds and US dollar.

Or vice versa if not, as we are also fairly sure that aside from any new, subtle, technical ‘twist’ (such as more of the same one they are currently pursuing), Fed Chairman Bernanke will have nothing to offer. While there are many possible permutations of the forces behind this, two primary reasons stand out. The first is the sheer buoyancy of the equities.

While expressing rightful concern over the US economy, he will likely be rue to use precious monetary ammunition with the S&P 500 in the 1,400 area. He is well aware that any crisis that causes a rapid equities selloff will require a QE response. Its effectiveness will be quite a bit more problematic if a round used up near the highs had proven ineffective. Secondly, much more of the reason for any crisis rests with the European political class right now. As such, it is important for the Fed to judge just how well or poorly that is going by the time of the ECB meeting next week.

And it is no small coincidence (or not) that ECB President Draghi cancelled his Saturday Jackson Hole speech. What exactly does “Too heavy a workload” back in Europe mean? Progress? Contentious political blockages? As close as we will get for now is Madame Lagarde’s speech on Friday. Which raises the question of how to commit to a major trend view this week? Not likely, even under the influence of whatever the good Chairman has to say tomorrow. More likely the ECB meeting and press conference that coincidentally (or not) is the same day as the Merkel-Rajoy meeting next Thursday is the real key to any extended trend…

…with ad hoc pronouncements from the German political class and others as a significant short term influence into next week.

Love these ‘politico’-economic markets!!

Thanks for your interest.

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