THEN AGAIN...

Maybe I am the only one who figured this out as the equity markets came bounding back again today.  Broad rejection of my thoughts?  I don't think so.  My pal Max used to tell me, "I don't care in which direction it moves just so it moves."  Trader talk and to an extent I think that's what was going on today.  Of course if you want more trader talk mixed in with some techie stuff, September is historically a lousy month for equities.  As has been said before I guess, only time will tell.

Tomorrow is the EU big pow-wow with Mario Draghi the man in the spot light.  What the optimists will be looking for are moderately good thoughts as to the European economy but not so good as to cause Mario to rule out a continuation of his QE or an extension beyond 2016.  Now this creates a very interesting scenario.  The Fed clearly wants to raise rates--not that 1/4% is a "rise" having made clear that any "normalization" will be a slow process--to what real intent I am not certain.  I can't believe that if Mario goes in any direction it can only be lower through addition money-creating mechanisms which puts the two central banks that really count at odds with one another.  Not good for the rest of us but as I have been saying these guys have been painting themselves into respective corners for years and it is becoming increasingly more difficult to get out without leaving a mess all over.  Stan Fisher has it right but he's really up against a very bad moment in time. None of them have any real tools left and the worst part is I think they know it at this stage but still refuse to confront the political establishments with an "Over to you, Gaston," which is what is really necessary.

Tomorrow China is shut for the great, "Daddy won the war" celebration and a show of the PL A's new toys.  There was a wonderful tale out of Beijing today about monkeys having been trained to climb trees and destroy bird nests so the little dears wouldn't fly into the intake of the PL A's brand new jets at the parade tomorrow.  I mean, come on.  Given the air quality, every bird within 50 miles of that place probably died some time ago or is too week to fly, but I guess you can't be too careful.  Which of course gives me no real comfort as to the ability of that bunch to micro-manage the world's second largest economy and to transform it as Chrissie would so dearly wish into a free, market economy.  Funny thing about free markets; they tend to do exactly what you don't want them to do from time to time.  What's even funnier is that some really important people appear to be just learning that.

OH, BOTHER

I think I'll go out and play with Tigger in the 100 acre wood…oh wait, I can't do that it's too damn cold.  Fact is I have no idea what to write about which is almost unheard of, but this Ukraine situation overhangs everything.  It's kind of surreal out there with nobody really talking about it and yet is is on everyone's mind.  The other thing is you can't really get a handle on what it is that people are thinking.  For example, today the equity markets were weak but so were bonds with the 10 year well-above 2.70% for most of the day only to slide back to the figure at the end.  I think what this is telling us is that no one is sure as to how to read the situation and especially the maker of the feast, Mr. Putin.

Angie thinks he's nuts; maybe she's right.  Then again, I think he knows exactly what he is doing and is probably delighted that we are discussing his mental state.  The Leader also appears to be clueless while the politicos rant and rave as to how much fault to assign to the Administration.  even in left-leaning circles there seems to be the willingness to assign quite a bit in the running of our foreign policy which might indicate the first break in the grid lock that has been Washington.  What a country.  The thing that gets me, however, is how the hell did this come as such a surprise.  Like, Hello?  I kinda thought the spooks were supposed to be all over something like this but from where I sit in the fly-over zone, Putin's actions indeed look as though they came as a surprise.  Perhaps we might start thinking about the reset button being shipped over to Langley or into the office of the NSA 'cause we are on the back end of the news cycle.

In the middle of all this The Leader's budget was brought front and center with….barely a murmur.  Everyone in town knows it is not serious, designed to make political points and one which neither side expects it to be debated much less passed which is just fine with them.  After all, it is the most important by-election in years.  We are in more disarray than I have ever seen in an increasingly long life and the middle of it all,  this morning comes the news that Leon Black of Apollo took home $565 million last year.  Now as far as I am concerned, Mr Black can take home a billion but can it be possible that this administration can talk about income inequality and job creation in the terms of a rise in the minimum wage and higher taxes in the face of a number like this which, to any sane person, seems to scream out that something is seriously wrong structurally?  To top it off, one of Mr. Black's contemporaries was quite openly talking about thanking Ben Bernanke publicly.  Think maybe we got something wrong?  They all are big contributors to the party of The Leader by the way, and they did it all with leverage i.e. somebody else's money I guess in accordance with the Fed's dual mandate.  …I must stop.  Ah, hell.  This is what happens when I don't have anything to write about.

I KNOW, I'M GETTING BORING

Right again.  Will I ever get it wrong.  No change to QE III (or is it QE VI?).  Much to the absolute delight of all the markets the Fed did not pick up on tapering which EVERYBODY was expecting except me.  Seems like there's a bit of a disconnect with the White House on how things are going labor-wise and economy-wise to the point where there is now no longer a hint as to when the program might be tapered (remember the 7% unemployment rate?).  There's nothing else to talk about today; you got it all.  But here is a thought:  As of 3 pm EDT, Sterling stood at 1.61 and the Euro at 1.35.  What do you think that is going to do to Euroland exports and where do you think emerging markets currencies stand as I write?  As Jimmy Baker said so many years ago, "The dollar is your problem."  Sure as hell is especially when you're short.

I love days like this when they make it so easy.  See you tomorrow.