Zero, 0%, zero, 0%

Great news, market is soaring on thin volume. This could turn out to be very interesting start to the year. It reminds us very much of last year’s start to the year. Markets are trying to break up on light volume, people are forced into buying this rally, and many of the “smart” shorts are covering in this very thin market. Let’s not forget, the World needs to refinance many trillions of debt this year, and yes rates will probably stay very low. El Erian on the zero rate policy, that must hold, or….By Bloomberg;

“You’ll see policy rates in the U.S. and Europe floored at or near zero,” Newport Beach, California-based El-Erian said in the interview. “I don’t think there will be any appetite or need to raise interest rates in the U.S. and Europe.”

The Federal Reserve has said it will keep its target rate for overnight loans between banks between zero and 0.25 percent through mid-2013, and is now selling $400 billion of its short- term Treasuries and reinvesting the proceeds into longer-term government debt in a program traders dubbed Operation Twist.

“Both the Fed and the ECB are involved in the consequential terms of buying assets — they are the market makers,” El-Erian said. “The rest of us have to decide what the implications are of having the big printing presses involved in the market. The long end will be the battle ground between credit risk — as sovereign issues remain on the radar screen and growth concerns” persist.

Full article here.