Prediction for tomorrow

[brewer12345]

Since I have moved on to the single malt after a grueling 2 hour commute, I will make a prediction. Tomorrow the Fed will bump rates 25BP (duh). However, they will make a statement that indicates that more rate increases are in the offing, rather than a pause. The market has NOT priced this in, so it will be painful, especially for rate-sensitive sectors. I think the spike in gold, other commodities, TIPS spreads and the plunge in the dollar is enough to couteract "Helicopter Ben's" tendency toward dovishness.

I will be buying January QQQQ puts tomorrow morning. A tip of the hat/glass to Ha.

 

[Dawg52]

I hope your wrong. 

 

[laurence]

What are you drinking there, buddy? I'm keeping it light with a Karl Strauss Amber Lager.

As far as tomorrow, I think Bernake will equivocate and basically say he's not sure what he'll do next meeting, but that he's leaning towards a pause. I think they've telegraphed a pause for too long now to do otherwise.

 

[haha]

Since I have moved on to the single malt after a grueling 2 hour commute, I will make a prediction.  Tomorrow the Fed will bump rates 25BP (duh).  However, they will make a statement that indicates that more rate increases are in the offing, rather than a pause.  I will be buying January QQQQ puts tomorrow morning.  A tip of the hat/glass to Ha.

First, a single malt toast is always an honor. But we had better wait until we make at least some money on this position. 

Second, is your prediction based on interest rate futures spreads?

Ha

 

[brewer12345]

First, a single malt toast is always an honor. But we had better wait until we make at least some money on this position. 

Second, is your prediction based on interest rate futures spreads?

Ha

Ha, for the record, its a position I hope makes no money.

My prediction is simply based on all of the indicators just about screaming that inflation is gettting away from the Fed. The equity market is definately acting like the punch has been spiked. TIPS spreads are ballooning. Commodities, Jeez! And the USD is pretty much in freefall lately. All of this says to me that the various markets are convinced that inflation will continue to increase. Bernanke has been making statements that the market has interpreted as dovish, yet "core" inflation is at the high end of the range that the Fed is supposedly comfy with and all of the headline inflationary pressures (full CPI) have been in the headlines enough that I think that people's expectations are becoming inflationary. Once the expectation of future inflation becomes embedded, it is VERY hard for the Fed to stop the ball from rolling downhill. This hasn't all quite come to pass, and the Fed will hopefully react soon. But that means higher rates, maybe 6% by the end of the year. That is DEFINATELY not priced in.

Laurence, my man, where you been? Highland Single Malt last night.

 

[Maximillion]

Scotch from small distilleries will out perform the DOW over the next 10 years.

Limited supply will become even more limited as the bigger distilleries gobble up the small ones and close them down.

Buy I to drink, 1 to collect, only quality, not the $50 stuff.

Collecting Fine Scotch is a bit of an art.

Fed will hold to expected rate raise, will take a wait and see tone.

 

[setab]

Brewer,

First things first.  I was toasting you back last night with The GL.  I will be in Scotland the end of the summer; any recommendations on what to try while I am there?  Oh yeah, the money thing.  I am such a novice there, but I have to admit that some minor tinkering with the TSP has me up about $6500 in the past month on a fairly modest balance.  Attribute most of that to International fund run ups.  Any suggestions on what to do to retain some of that ill gotten gain?  Thanks, and a wee dram back to ye.

setab

 

[JPatrick]

Buy ENG/Consume Corona

The market is overdue for a tumble.  Doesn't matter why, just that it is.

 

[brewer12345]

Brewer,

First things first.  I was toasting you back last night with The GL.  I will be in Scotland the end of the summer; any recommendations on what to try while I am there?  Oh yeah, the money thing.  I am such a novice there, but I have to admit that some minor tinkering with the TSP has me up about $6500 in the past month on a fairly modest balance.  Attribute most of that to International fund run ups.  Any suggestions on what to do to retain some of that ill gotten gain?  Thanks, and a wee dram back to ye.

setab

On Scotch, I have to say that I have no clue.  I've always been too cheap to develop much knowledge of different varieties.  True to form, the Scotch I was drinking last night was realtively cheap because it is from an almost unknown distillery started up about 20 years ago by a guy who has spent his career in the industry.  Still made pretty good whiskey, though.

How to preserve ill-gotten gains?  I have been toying with the question myself.  I've held a good chunk of EFA for a while and I took some off the table last month since it was getting out of balance.  Still chugging upward, though.  Getting to the point where I might take some more off the table.  I guess you might consider selling a chunk of whatever has run up and reinvesting in whatever looks cheap/has been sliding.  Hey, that sounds like rebalancing...

 

[audreyh1]

Seems like the market has really set itself up for a "sell the news" scenario almost no matter what Bernanke says. It's been chomping at the bit anticipating "the pause" for so long, that even if it materializes, it's already priced in and no where to go but down.

If it doesn't materialize, then even bigger excuse to sell off.

We'll see today!!!

Audrey

 

[setab]

Thanks, Brewer. I've got to be careful; you guys are starting to get me interested in this stuff. REBALANCING!!!!Dog germs! Need more single malt.

setab

 

[Maximillion]

http//www.charm.net/~kmarsh/scotch.html

Even better, go visit the Distilleries.

 

[Maximillion]

http://www.charm.net/~kmarsh/scotch.html

 

[cute fuzzy bunny]

Up a quarter, bernanke announces he's joining alan greenspan in a carnival act where they'll dress up like bears and stand on dunking platforms, $5 for three balls. Pundits determine this to be a clear indicator of excessively dovish behavior. After a brief and confused small dip, the dow goes up 88 and the s&p500 16. Tomorrow, everyone spends so much time analyzing and reanalyzing every aspect of the dunking platform idea and what the bear suits mean, that they all forget to trade.

 

[brewer12345]

Up a quarter, bernanke announces he's joining alan greenspan in a carnival act where they'll dress up like bears and stand on dunking platforms, $5 for three balls.  Pundits determine this to be a clear indicator of excessively dovish behavior.  After a brief and confused small dip, the dow goes up 88 and the s&p500 16.  Tomorrow, everyone spends so much time analyzing and reanalyzing every aspect of the dunking platform idea and what the bear suits mean, that they all forget to trade.

Either that, or Elevator Ben declines to comment further to reporters because he is busy getting ready for a quail hunting trip with the Vice President.

 

[audreyh1]

You guys crack me up with your creative "predictions"

Audrey

 

[HFWR]

The end of the world is near... 8)

 

[MasterBlaster]

I predict that there will be more predictions

 

[rs0460a]

I predict that there will be more predictions 

Is this comment based on fact?  :

 

[laurence]

Laurence, my man, where you been?  Highland Single Malt last night.

Business travel, killer. I just drink Glennlivet, I'll have to try that.

 

[CybrMike]

interesting. he raised the rate. Said there might be a pause, and BAM - nothing happened.

 

[Cool Dood]

Like, OMG.. LOL!!!1

Of all the surprises in the world, it turned out to be that there wasn't a surprise. Big surprise...

 

[brewer12345]

interesting. he raised the rate. Said there might be a pause, and BAM - nothing happened.

Actually, I didn't see anything about a pause.

 

[laurence]

Some are interpreting his statement of "must absorb economic data" as they'll take a pause...

 

[brewer12345]

Some are interpreting his statement of "must absorb economic data" as they'll take a pause...

Uh, OK. Well, when I look at the data (any/all of it) it screams "INFLATION!" to me. I'm not a Fed governor, but I don't imagine I am that far out in left field (for economists). What are they waiting for? $1000 gold? $8 gasoline? 10% CPI?