Wednesday, December 14, 2016


Fed moved 25 b.p. today as everyone knew they would.  Ms. Yellen's statement sounded like nothing had happened since the last meeting...nothing, zero, nada on the election or it's possible aftermath.  She was  a bit bullish in he predictions which called for a probable thrice-hike of 1/4% in 2017 and an eventual top rate of 3.00% by end-2018.  Down went the DOW 114 points; up went the dollar index; the 2, 5 and 10 year shot up with the latter easily passing 2.53% but the Long Bond sat still.  Damnedest thing...the curve actually flattened on the long end.  What does all this mean?  Beats me.  Markets are bullish; rates have been moving up; employment is at full capacity according to the manner by which it is counted which is of course rubbish and sentiment is sky high.  Janet, who loves data followed the data.  Can we all move on now?

Oh, if you are looking for truly nuts, the Greeks are back in the news.  Not to be content with BREXIT, the mess in Italy, the upcoming French and Dutch elections, the Euros have decided to grant the Greeks no further debt relief because it appears the Germans threw a hissy fit over PM Tsaspris' decision to grant Christmas bonuses which was verboten under the standing agreement.  OK, say the Greeks, we're going to call for snap elections early next year so you guys have THAT, too, to deal with and of course a conservative government will win on a campaign of dump the Euro and if it comes to it, the Union as well.  Guys, can't we all just get along?  The Greeks can NEVER pay what they owe so why care.

And of course the Italians are forming a new interim government, the 1,236,202 in the last hundred years and people are actually bidding up the shares of Italian banks like this is a good thing.  UniBank is talking up their capital raising exercise and Monte di Paschi is as well.  Speaking of wells, there has to be something in the water in Italy...the old Roman viaducts broke down or something.  They gotta test that stuff.

And the other Wells...Fargo that is.  Their living will was rejected.  Poor Big Danny Tarullo:  the only saving and loan on his watch list (he likes that kind of business model) has let him down.  Talk about the Grinch who stole Christmas.  Danny is left pontificating while staring out into space wondering how did it all go so terribly wrong so fast.  Worst yet, in 45 days of so he's going to have to deal with that bunch of thugs from Goldman Sachs over at Treasury so here is my first prediction for the new year:  Mr. Tarullo will be the next governor to resign from the Federal Reserve...IT'S BEGINNING TO LOOK A LOT LIKE CHRISTMAS........!


Tomorrow will be the last regular entry for a while except for the occasional effort.  We head East to baby sit and then for Christmas and when we return we'll be all-consumed selling our house and moving to another smaller location in the neighborhood.  Very bittersweet.  This place has been great to us and in the almost 16 years we have owned it not very many bad things have happened.  But it's time.   I hope to be up and running by mid-January.  A most Merry and Blessed Christmas to all, you my readers and a Brilliant New Year.


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