Taper Mania, Taper Tip-Off, whatever you chose to call it, the obsession with this issue continues to rattle the market. Last I saw, the 10-year treasury was trading around a 2.35% yield in after-hours trading (up from around a 2.18% yield earlier in the day). Volatility has come to the treasury market. And all Bernanke indicated was that we might see a wind-down in purchases of treasury and agency MBS by year-end. He did not say they would be selling or moving to raise short-rates, just that the purchases might begin to ebb by year-end. Oh well, you know where I stand (session 41). QE and its wind-down are all a matter of PERSPECTIVE.
Since The “Dreaded Taper” is about all we’ve heard about for the past few days, I thought you might be interested in some selected media items that go the mission of this blog to call out the media hype and misrepresentation concerning the financial markets. Included in our post is a rant by that stalwart of CNBC, Rick Santelli; a story on the termination of Fox Business Channel contributor, Towbin Smith, over a paid relationship with a company that he promoted; and another brush with Dr. Doom / Boom, Nouriel Roubini and co-author Ian Bremmer “…The Fed Policy That Is Going To Implode.”
Now, if you are not familiar with Rick Santelli, CNBC/CBOT commentator, I call him the ‘last angry man.’ I do this because for the past six years he has consistently ranted and raved (from his perch on the Chicago Board of Trade’s trading floor) about every policy move made by both the Bush and Obama administrations to bolster the economy thru the financial crisis. He has argued vociferously against TARP, the auto bailout and the stimulus. He has also been a staunch and consistent bear. It would almost seem that he lives by the dictum, ‘if you don’t have something really bad to say about something or someone, don’t say anything.’
Mr. Santelli really hates QE. So, you will see in the attached clip, where he baits John Hilsenrath (The Journal’s Fed watcher / reporter) in a lively interview / mostly-Santelli-rant. It is nice to see Hilsenrath strike back at the end of the piece when refers to Santelli’s less-than-stellar predictive record.
Our second nugget for today is one of those investor-beware tales. This piece was and continues to be the most read post today on MarketWatch (an on-line service from Newscorp’s Wall Street Journal). It seems that one of the Fox Business Channel’s contributors, a Tobin Smith, was terminated for having a paid promotional gig with one of the companies that he recommended in his market letter. This is definitely a no-no, and Fox did the right thing. Importantly, even though there are protestations to the contrary and disclaimers to boot, I am sure that the experts that we all see elsewhere have agendas, paid or otherwise, that may represent conflicts. The Tobin Smith story is a good reminder to all, even the recreational viewer….Caveat Emptor.
Finally, a regular in this blog, Nouriel Roubini made it to another post. He and a co-author Ian Bremmer were headliners in yesterday’s MarketWatch with a piece”...And The Fed Policy That Is Going To Implode” (More bad news on QE). Professor Roubini is one of our “One shot Wonders” from session 13 and he was featured in “Bad News Bearer” session 38 with some actual positive commentary. I guess the article yesterday was meant to bring us back to earth. In session 38 he says the market ought to do OK for the next couple of years. In yesterday’s piece, to paraphrase, after that we better watch out…potential disaster looms….“It may be too soon to say that many risky assets have reached bubble levels and that leverage and risk-taking in financial markets is becoming excessive, but the reality is that credit and equity bubbles are likely to form in the next two years owing to ongoing loose U.S. monetary policy.”
Enjoy, and tell me what is on your mind.
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