One of the most common phrases I hear in the market is - "this is going to end badly". You hear it from Presidents of Federal Reserve Banks, Congressmen, gloom and doom market pundits, disgruntled fund managers who missed the risk rally and German politicians just to name a few. These naysayers/doomsayers need to save […]

Ok, I am going to be a bit of a geek today. So no Breaking Bad, Colonel Jessup or Charlie Sheen references. Sorry to disappoint but there are some serious changes under way in market correlation patterns. And these need to be addressed. Specifically, the USD is strengthening sharply as seen in the near 4 […]

In the last week, there was an unusually clear message from the core of the FOMC. Ben spent hours answering questions in front of Congress last Tuesday and Wednesday - and then gave a strongly worded speech on Friday in San Francisco. On Monday, his number one sidekick Janet then delivered a even more powerful […]

As our beloved colonel/chairman took the stand this week, nerves in the market were frayed. News of Italian election chaos and the sequester were splashed across the screens. Spoos had been pounded, the Yen was rallying and you could hear the screams of pain from levered traders across the globe (many of whom sent me […]

The markets continue to be driven in the short term by a lot of noise. People are focusing on the UK downgrade, Italian elections, Cypriot bailouts, LTRO paydowns, the US sequester and Charlie Sheen's twitter pictures during the Oscars. All of these "focal points" have about the same long term relevance for financial asset prices […]

In the December minutes, the following passage got everyone hot and bothered - “In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy […]

This is NOT a currency war - it’s a growth war. And the rules of engagement were established this past week by the G20. We could think of the released statement as a sort of "Geneva Convention" for the upcoming fight. And let's make no mistake - this is setting up to be an epic […]

Before discussing "Bubble Busters" - which should hopefully generate a few morning laughs - I want to address two very important points from last week. First, I wrote a quick comment last Wednesday entitled "Why would Mario be hawkish?". The premise was that at last Thursday's ECB press conference he would spin a dovish tale […]

Europe has tried to stage a comeback as a "risk-off" force in the global markets after essentially losing all its relevance in the last 3 to 6 months. Somehow, with Italian 2 year yields at 1.60%, I cannot get very excited about the prospects of Europe staying in the "doom and gloom" limelight for very […]

Spoos +9, Blues +7, it just doesn't get any better than that! The Fed has your back if it gets bad, and the Fed will be slow to react when it all goes right. The basic trade of long risk/long blues is the best representation of that view in the market - hands down. If […]