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  • The Bond Market Can't Crash if Fed Taper Is Already Discounted

    From minyanville.com

    Volatility, negative convexity, and the bond market's paradigm shift. In the wake of Friday's better-than-expected 203,000 non-farm payroll report, the Wall Street Journal's Jon Hilsenrath reported that with the better economic news that preceded this data, the Fed is likely to begin to scale back on its controversial $85 billion per month bond-buying program. Thus while the headlines focused on the torrid rally in stock prices, in light of this interpretation, the real story of the day was the reaction in the bond market and more specifically the mortgage-backed security (MBS) market. The initial knee-jerk reaction ... (full story)

Yea, too bad it's not discounted. Markets have gone nothing but up...where's the discount? 3 pts below the high?
When the facts change I change my mind, what do you do sir
So this article is based on WSJ.com. First of all, then why isn't the WSJ.com article posted here instead?

Second, with Janet Yellen being nominated, the Fed may not Taper. The Fed could just"Move the Goalposts" and declare that now a 6.5% unemploymemt rate will be the new trigger point. And then if the 6,5% is somehow reached.......etc.
To me the market are moving was like tapering is not going to happen. How long has the tapering been bring up like what almost 6 months now. Every FOMC meeting is the same story tapering aren't happen. You can bluff market with tapering for so long. At some points market just going to say this is jsut bluffing tapering isn't happen until ben give the date. So the tapering is not already discounted within the price.
Quoting toptrader11
To me the market are moving was like tapering is not going to happen. How long has the tapering been bring up like what almost 6 months now. Every FOMC meeting is the same story tapering aren't happen. You can bluff market with tapering for so long. At some points market just going to say this is jsut bluffing tapering isn't happen until ben give the date. So the tapering is not already discounted within the price.
They say it's discounted or the rally is not based on the Fed. Anyone want to bet how many points the S&P declines when $20 Billion is knocked off
When the facts change I change my mind, what do you do sir
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  • Posted: Dec 9, 2013 9:35pm
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 4  /  Views: 2,005