6 votes

How will the markets greet Yellen?

It's 1:35 in the morning, and I should be sleeping, but I'm thinking that tomorrow is a big day. Tomorrow is Janet Yellen's debut before the Markets.

One thing we know about Markets is that they like to buy the rumor, and sell the news.

In the meanwhile, I'm reminded of this quote on the nature of the Fed, from my previous site Bull! Not bull.

I am fascinated by the common perception that the Federal Reserve is a proven non-stop inflation machine. Inherently, the Federal Reserve uses inflation and deflation to whipsaw the average bystander out of their savings. I don't see how one economic machination is more favored over the other when the goal is to ensure that the public's savings ends up in the accounts of the shareholders of the Federal Reserve System.

Whatever we're in for - and doesn't it just feel like we're in for something big? Here is the debut of the woman who is going to be at the head of that ship of the Fed, which from all accounts looks like the Titanic headed for an ice berg in the middle of a raging, dark, nasty storm. This is Captain Yellen, Starship Federal Reserve. This is Prisoner Yellen. Prisoner of the System...

I'm just up late thinking, but I've got to go to bed. Leaving back to Taiwan soon.

For the Fed, this is not only a changing of the guard, but we enter a period wherein the public gets to know a new Puppet. It is a time that is fraught with danger, as the Puppet is new, and the masses might catch a whiff of something...untoward. The handoff has to go perfectly.

So much drama plays out in the market every day. Everything is connected, and Janet is a giant cog in the workings.

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Yellen is less important in the short term

The first hurdle is how congress gets through the debt ceiling
Yellen is just a part of a progression of increasingly dovish fed presidents willing to provide liquidity to anything that dries up.

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Michael Nystrom's picture

Gold is really struggling with 1300

Keep your eye on it.

Kitco's got Gold at 302, down 4.

This is one of these nights. You wake up and gold could be up 50, or down 50.

They're like foreshocks, this market volatility.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.
Michael Nystrom's picture

Gold didn't like something

Down $21, according to Kitco to under $1,300 again.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.

Plunge Protection Team keeping dollar from plunging

Make it look line deflation even though money being created and wasted at record rates.

Economic Law: Whatever can't go on forever, stops.

when cost of market manipulation exceeds profits, investment evaporates.

Free includes debt-free!

Michael Nystrom's picture

And then what happens?

.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.

My answer is graphical. An engineering chart.

When I dig out your email address, I'll send a copy.

Kepler plotted heavenly motions, Newton found the equations, but Hume asserts that we don't know if the sun will come up tomorrow. We have expectations based on empircal evidence. However, past performance does not predict insure what is coming.

We know, from the record that the Treasury has increased the money supply apx 1024 times, (Increased the debt over 1000 times.) with Congressional blessing.

We know the historical prices of gold, silver and copper priced in fiat dollars.

Free includes debt-free!

Stock market will soar...

now that they know the funny money will continue to be printed in unlimited fashion.

dont play the game

who the eff cares... i do not have a single penny invested in the stock market...
well i lied.. i have 1 option on herbalife that im betting goes stratospheric on an ackman short squeeze.. other than that nothing

and i sleep like a baby every night

Ron Paul 2012

Michael Nystrom's picture

But the game is fun!

furthermore...

I enjoy it.

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.

yes

I do miss it sometimes... especially since I've stopped playing Poker too (another game that I used to enjoy immensely). Perhaps I do need to find an outlet, periodically dabbling with some options... Glad you're having fun Michael! :-)

Ron Paul 2012

My Prediction

For all intents and purposes the market already knew Yellen was going to be next in line; any change in asset prices has already occurred. My prediction is that tomorrow will be a more or less steady day.

If something big DOES happen (which I am predicting not), my guess would be it has to do with something on government shutdown / debt ceiling issue. Of course there will be no way to disentangle these two variables so we'll never know if I'm right.

But if I were a betting man, I would say the markets will be steady tomorrow.