Archive for September 13, 2012

2012/09/13: Fed Head Extends Anti-Dread Meds

September 13, 2012 2 comments

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

You have to admire the Fed for nothing quite so much as the sheer audacity of putting forth another major round of Quantitative Easing (QE3… or is it even more than that? See below.) Before our critique, let’s allow some Sympathy for the Devil (or whatever it is the fiscal and monetary conservatives consider Mr. Bernanke.) The Fed is in a really bad spot of having that dual mandate, which requires them to make some significant efforts in the realm of full employment.

It was painfully obvious that concerns over the weak US jobs picture was a primary driver for the extreme quantitative easing communication in today’s FOMC statement, which was fully confirmed at the Federal Reserve Chairman’s press conference. With Europe barely feeling its way along toward its own Sovereign Debt Crisis cure, and the rest of the world for the most part in a weaker state than the US, Bernanke & Company felt compelled to eliminate the “tail risk” of any further weakening of the US economy.

Will it help? There are some serious doubts based on a whole range of factors. But at least the logic is now perfectly clear, as Mr. Bernanke was extremely specific about the rather loose transmission mechanism he hopes will carry the day. It can be generally described as the ‘Portfolio Cure Channel’: asset prices moving higher includes the stock market, and that makes people feel better, and maybe they will go out and buy something. We will obviously need to seriously monitor whether those sorts of current Fed tactics actually amount to anything in the real economy.

Just as with our previous posts on QE is the Opiate of the Perma-Bulls, we remain more than a bit skeptical.  But the one thing we know for sure is the Good Doctor has certainly administered a massive dose of meds to help the patient get past the pain of the inept, ineffective regulatory policy in Washington DC. Yet there is much in the current market response, longer-term economic data and even the more conservative quarters at the Fed that leads us to doubt this will end well…


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2012/09/13: Quick Post: Pre-FOMC/Bernanke Fresh Tech Now Available

September 13, 2012 Leave a comment

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

Less than an hour until the FOMC statement, and our next set of Technical Projections and Select Comments are already available via the link in the right hand column. We delayed updating these levels until today in order to adjust them as close as possible to the critical influence emanating from the FOMC statement, revised economic and interest-rate projections, and Chairman Bernanke’s press conference.

As we all knew from the top of this week that the Chairman’s discussion would likely be the most prominent influence, it is not really much of a surprise. And yet, the degree to which individual markets and all asset classes are now all indeed poised for bigger decisions into key technical levels is impressive nonetheless.

And all trend tendencies remain very consistent with views expressed previous. Anyone who has not already reviewed it is encouraged to read yesterday’s TrendView MARKET ALERT on the various critical psychologies (including some very interesting inconsistencies) and technical levels. The bottom line is that recent price swings have brought many asset classes to critical trend decision levels.

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

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