Will we remember Bernanke as the man who “collapsed” the Markets, while doing everything to save it from collapsing? Risk Off. Will we see 2/30′s negative? Operation Twist not impressing the Markets. As of writing this post, Italy is cutting it’s GDP forecasts. Below,; gold, eur, aud and SPX.
Like we wrote earlier today, Make or Break.
Operation Twist here we go.
FED TO BUY TREASURIES WITH 6-YEAR TO 30-YEAR REMAINING MATURITY.
Downside risk to Economy.
Plosser, Fisher, Kocherlakota not supporting the vote.
Futures initial reaction falling down…..
Interview with Bundesbank President Weidmann. Full Der Spiegel interview here.
SPIEGEL: It’s just that it doesn’t do any good. The two German members of the ECB Council are opposed to buying up the bonds of deeply debt-ridden euro countries like Greece, Portugal, Ireland and Italy, but for months now representatives from southern Europe have outvoted you on this issue.
Weidmann: Just because you don’t have a majority for your position at all times doesn’t mean you should stop defending it.
SPIEGEL: But the number of your allies is constantly shrinking. When the ECB Council debated the purchase of Italian bonds in early August, only you and ECB chief economist Stark reportedly voted against it.
Weidmann: One of the customs of the euro system is not to discuss voting behavior. Nevertheless, my position on the purchases of government bonds is sufficiently known. As a result of many of our monetary policy measures, we helped prevent the crisis from escalating. However, the euro system added substantial risks to its balance sheet as a result. The necessary distinction between fiscal and monetary policy is being blurred, and individual measures are associated with special risks. That’s why these risks have to be reduced.
While the HFT churn stocks according to the latest out of the Greek Parliament, the US has other issues to deal with. Despite Ben’s ramp up the Stock Market stimulus, people still feel everything is getting worse. Latest out if Gallup;
The lack of consistent economic progress since 2009 has dashed Americans’ optimism that things will get better in the near future. Just over a third of Americans expect the economy to be better a year from now. With the economy and unemployment firmly atop Americans’ list of the most important problem facing the United States, both the health of the overall economy and Americans’ perceptions of its health have obvious implications for President Obama as he seeks re-election next year. His jobs plan, which Americans generally support, is perhaps his most important step in trying to improve the economy. To be successful, it must not only move the needle on official economic statistics, but also re-instill confidence in Americans that the economy is getting better and will continue to do so.
Fed Watch Post by MoreLiver;
Presignaled: twist, lower interest on excess reserves or better communication.
** Don’t expect miracles from the Fed – Humble Student of The Markets
Credit Suisse on where the market has mispriced Twist – alphaville / FT
Goldman Says ‘Operation Twist’ Is Going To Be $300-$400 Billion – The Daily Capitalist
Comments on Rosenberg’s article on alternative Fed actions (below 18th Sep)
Italy got Downgraded yesterday. The two main factors for the downgrade according to S&P are the political and the fiscal issues Italy is facing. Yes, we all know Berlusconi is screwing the whole nation, and that the fiscal situation is quite alarming given the debt Italy is running. There is one chart though, that doesn’t receive much attention. Demographics in the Med area is rather disturbing. Both Italy and Spain will face some big burdens going forward, if they don’t deal with this issue in time. Who’s gonna pay for the ageing population?
Many readers ask us about the situation in Greece, Implications for the Markets, What and Why it happened. Debtocracy, the single most tutorial movie on the Greek situation, presented earlier this year, gives a great insight regarding the Greek Dilemma. A must see if you haven’t seen it before.