I am a chartist at heart - those that know me though also know that I do follow the 'fundies' to some degree - I mean, c'mon, hanging a story on top of some solid technical analysis is comforting, just like my down slippers that have been brought out the closet already with the cold Central Oregon mornings recently. That being said, my comment below are regarding recent comments from Treasury Secretary Paulson:
Normally there are so many comments each day from experts, government officials, you would need to be a linguist or an expert at spotting BS in order to make sense of it, let alone make trades off of it.
However, Treasury Secretary Paulson however could not have been more clear in his recent comments thus adding some clarity to what has been volatile and murky outlooks.
Paulson suggested that the current market turmoil will last longer than the 1998 crisis. There have been government sources suggesting that the sub prime fall out will take two years to deal with. Paulson made clear that the current crisis has very little to do with central banks running too tight liquidity conditions.
Hence, the problem of wide credit spreads and dis-functioning money markets will not be solved by adding central bank liquidity. Liquidity adds just ease the symptoms of the crisis.
Therefore consider the equity market rebound, built on hopes of the Fed taking bold action by cutting interest rates by 50 bp's next Tuesday, as premature. If the market does not get a rate cut, expect weaker equity markets and a solid return back to carry trade unwinding - i.e. lower USD/JPY and EUR/JPY.
Normally there are so many comments each day from experts, government officials, you would need to be a linguist or an expert at spotting BS in order to make sense of it, let alone make trades off of it.
However, Treasury Secretary Paulson however could not have been more clear in his recent comments thus adding some clarity to what has been volatile and murky outlooks.
Paulson suggested that the current market turmoil will last longer than the 1998 crisis. There have been government sources suggesting that the sub prime fall out will take two years to deal with. Paulson made clear that the current crisis has very little to do with central banks running too tight liquidity conditions.
Hence, the problem of wide credit spreads and dis-functioning money markets will not be solved by adding central bank liquidity. Liquidity adds just ease the symptoms of the crisis.
Therefore consider the equity market rebound, built on hopes of the Fed taking bold action by cutting interest rates by 50 bp's next Tuesday, as premature. If the market does not get a rate cut, expect weaker equity markets and a solid return back to carry trade unwinding - i.e. lower USD/JPY and EUR/JPY.
) sense. It would be interesting to correlate these numbers with the actual results over time. SunTrader - does CBOT provide access to historical data on these? (The fed stuff is just a nicely formatted version of the same data).