Friday, August 16, 2013


...and not a moment too soon I suspect.

The British papers seemed to be covering just one story all day long, namely the belief by almost everyone in the City that Sterling would have at least a 5% fall over the coming months as a result of the policies of the Bank of England.  Needless to say, the Pound closed well above 1.56 where it hasn't been for some time.  They haven't a clue Over There either.

Meanwhile, Over Here, the ten year ended the day at 2.83% and big change despite lousy numbers and trembles on the equity front.  Admittedly, I don't understand what's going on but i think one thing is becoming clear: the Fed has lost control of the bond market and unless or until clear policy definition emerges, they are not going to get it back.  That may not be a bad thing.  I still remain convinced that a combination of Bernanke/Yellen will maintain the current version of QE in a never-ending attempt to prove themselves right, but no one else agrees...and the buyers disappear.

Of course the administration seems oblivious to what's going on and the Congress could care less.  If there was ever an argument for reducing the Fed mandate to one, this is it.  The Fed is stuck in place  and makes a convenient fall guy for the failure on the part of The Leader and Congress to govern.

We are an embarrassment in full.  Domestic fiscal and monetary policy in a shambles; foreign policy non-existent in any sphere but especially the Middle East; an administration that has clearly lost it's way, contradicting itself daily and denying the undeniable and avoiding the unavoidable.  I wish I could be more positive but right now I think I'll follow the advice of the Great Art Cashen of CNBC:  start marinating a few ice cubes and await the weekend which is going to be glorious in the Fly-Over Zone.


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