March, Friday 16, 2012

DOW – 20 = 13,232SPX + 1 = 1404NAS – 1 = 305510 YR YLD +.02 = 2.30%OIL + 2.04 = 107.15GOLD + 2.80 = 1661.10SILV + .02 = 32.66PLAT – 13.00 = 1675.00 You look at the markets and you’re confused. I know. The markets can be confusing. We heard that the Federal Reserve FOMC was feeling sanguine; the economic outlook was copacetic. And in the pretzel twist that passes for logic, that meant the Fed was not going to approve a new round of Quantitative Easing; the Fed would not shovel free money from a helicopter to rain down on Wall Street. Certainly, the markets would convulse and complain, they would twitch like a junkie past due for a fix. So far, no problem. Pretty much every asset class has been moving higher. Go figure. It’s pretty simple. The Fed will continue to provide free money to their Wall Street banking buddies; that’s what the Fed does. There is no exit strategy from QE. In fact, not easing would be the equivalent to tightening. Really, it’s just a matter of timing and deciding on a good name. It might not be called QE3; it might be called Operation Twist Some More, Maybe they’ll call it the Sterilized Accommodation, or maybe just the New QE. Make no mistake, the Fed will have a purchase program that involves purchases of mortgage backed securities and Treasuries. The Fed’s balance sheet will expand. There are several reasons to expect more free money …