Fed Humiliated With Red Close Despite Dovish FOMC And GDP Revision

July 31, 2013

A very volatile day in stocks ended with a violent high volume dump from post-FOMC highs on heavy MoC selling pressure that left the S&P and Dow with red closes. S&P futures still managed their best month since Oct 2011 – though unable yet again to capture the 1,700 flag. The size and scale of the ‘rotation’ into the close (and strength in bonds) leaves us wondering who is buying and who is selling. For some context, post-FOMC, S&P -4pts, 10Y -8bps, Gold +$10, USD -0.15%; so it seems bonds benefited the most and stocks seem to be crying out for moar. The Dow has now closed red for 3 days-in-a-row – the worst streak in seven weeks.

How long do you think print, print print will work before peopl figure out the phony numbers are just to distract the unwary?

Markets are going sideways … with a down trending.


SHILLER: ‘We’re Living In A Totally Artificial Real Estate Economy’

March 27, 2013

“One thing that makes it very hard to forecast home prices right now is that we’re living in a totally artificial real estate economy,” said Shiller, co-creator of the Standard & Poor’s/Case-Shiller Index, a widely followed measure of housing prices.

Shiller pointed to the Federal Reserve, which last week reaffirmed its policies on bond purchases and record-low interest rates. In September, the Fed launched a third round of quantitative easing (QE), in which it has bought $40 billion of mortgage-backed securities per month, primarily in mortgage-backed bonds.

Meanwhile, Fannie Mae and Freddie Mac, the two largest U.S. home funding sources, remain in government conservator-ship as Congress looks for ways to raise new tax revenues, Shiller noted.

“All of these things are weighing on the futures of housing,” Shiller said on CNBC’s “Futures Now,” adding the recovery might even be a bubble. “One thing you learn from history is that bubbles can occur at any time.”


Fed Projects High Unemployment Into 2015

March 21, 2013

OK so today the Fed says they are going to keep on printing. Until the economy improves.

The latest on the recovery.

WASHINGTON– The Federal Reserve said Wednesday that the U.S. economy has strengthened after pausing late last year but still needs the Fed’s extraordinary support to help lower high unemployment.

In a statement after a two-day meeting, the Fed stood by its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent, as long as the inflation outlook remains mild. And it says it will continue buying $85 billion a month in bonds indefinitely to keep long-term borrowing costs down.

Read more at manufacturing.net …

But apparently they didn’t tell the same story to those who know better. You see how it works? Differing stories for different audiences.

Here It Comes Again …

March 7, 2013

Is another downgrade on the way?

Low information voters, pay attention, your future is about to be downgraded, again.

On Monday, Standard & Poor’s, for the first time, shifted its outlook on U.S. creditworthiness to “negative” because of the nation’s accumulating debt. The announcement rattled investors and could increase pressure on both sides in Washington to work out a broader deal as part of the upcoming vote over increasing the government’s borrowing authority.

WP reports:

The ratings agency Standard & Poor’s warned the United States on Monday that it could lose its coveted status as the world’s most secure economy if lawmakers don’t rein in the nation’s nearly $14.3 trillion debt.

The finding, the first of its kind in the 60 years that S&P has been judging the country’s credit quality, sent a jolt through the markets and injected a new sense of urgency into the debate gripping Washington over whether to allow the Treasury to keep borrowing.

S&P changed its outlook on the United States from “stable” to “negative” and said the federal government could lose its AAA rating if officials fail to bring spending in line with revenue.

Liberal Mecca: Illinois’ credit rating downgraded; state drops to worst in the nation

January 27, 2013

Can’t Pay For all their free stuff. Moochers and looters, not happy.

Illinois’ credit rating has taken another hit.   Standard & Poor’s Ratings Service downgraded the state from an “A” rating to “A-minus”, making it the worst in the country.
The New York ratings firm’s ranking means taxpayers may have to pay tens of millions of dollars more in interest when the state borrows money for roads and other projects.
The downgrade is the latest fallout over the $96.8 billion debt to five state pension systems.
The downgrade now ties Illinois with California, but California has a positive outlook.
Illinois’ fragile overall financial status netted it a negative outlook, putting it behind California overall.
The ratings came out now because Illinois plans to issue $500 million in bonds within days.

Spain downgraded by S&P (heading towards “junk” status)

October 10, 2012


Standard & Poor’s lowered its credit rating for Spain on Wednesday, in a move that could complicate Madrid’s effort to avoid requesting a financial bailout.

S&P cut Spain’s long-term credit rating two notches to “BBB-” from “BBB+,” the ratings agency said in a statement. It also lowered the nation’s short-term rating and said the long-term outlook for Spain is negative, meaning it could lower the rate further.

The move reflects the risk of “increasing social discontent” as the Spanish economy slips deeper into recession, according to S&P. It also warned of “rising tensions” between the central government and Spain’s semi-autonomous regions.

A growing number of Spain’s 17 regional governments have requested bailouts from the central government in Madrid. Catalonia, the largest of region, has threatened to secede.

“Overall, against the backdrop of a deepening economic recession, we believe that the government’s resolve will be repeatedly tested by domestic constituencies that are being adversely affected by its policies,” said S&P. “Accordingly, we think the government’s room to maneuver to contain the crisis has diminished.”

n addition, S&P warned that the latest plan to recapitalize Spanish banks “still lacks predictability.”

Spanish banks need to raise a total of €60 billion to fill the hole left by the bursting of the nation’s property bubble, according to a recent audit. Euro area finance ministers agreed in June to provide up to €100 billion in bailout loans to recapitalize Spain’s banking sector.

Read more at buzz.money.cnn.com …

Illinois’ credit rating downgraded after pension reform failure

August 30, 2012

Unions won’t see what they have done is unsustainable, so they want to bring the place down. Like Greece.

Illinois’ credit rating was downgraded by Standard & Poor’s on Wednesday, a move that came after Democrat Gov. Pat Quinn’s inability to persuade lawmakers to cut costs in the state’s debt-ridden public employee pension system.

The agency lowered the state’s credit rating from A+ to A, citing a “lack of action” on changes aimed at decreasing the pension system’s unfunded liability, which could hit $93 billion by next summer if nothing is done. Standard & Poor’s also gave Illinois a “negative outlook,” saying the state’s budget future remains uncertain.

It’s unclear what impact the new rating will have on Illinois’ pocketbook, but it is likely that it will cost the state more to borrow money to finance construction projects including new schools, roads and bridges.

Only California is ranked lower than Illinois by the S&P, with a credit rating of A-. But unlike Illinois, California has been given a “positive outlook.” Illinois already has the lowest credit rating in the nation from Moody’s Investors Service, which has warned that another downgrade is possible unless something is done to address the state’s growing pension liabilities.

Hey Obama isn’t that your State?

Why yes, I believe it is…

What’s the excuse for that? This is where I learned all about fiscal responsibility … from the great corrupt blue state unionized Democrat stronghold of the Democratic People Republic of Illinois!


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