Random Thoughts: Credit Concerns Emerge and Gold Breaks Down

By Todd Harrison  OCT 11, 2013 11:15 AM

Tying together an increasingly complex world.

 


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

Oh, I like this one... One dog goes one way, the other dog goes the other way, and this guy's sayin', "Whadda ya want from me?"
--Tommy DeVito, Goodfellas
 
Global markets exhaled yesterday as hope of an amicable political resolution permeated.

Consistent with the vibes shared after the FOMC minutes were released on Wednesday, the most likely scenario was -- and remains -- a short-term resolution as politicians find a middle ground that will push the debt ceiling a few months out on the horizon. 
 
While some argue that this is a Band-Aid on a broken bone, the disaster scenario was perceived to have been avoided, and as that was priced into the market, stocks had one of their best days of the year.
 
The action in the credit markets yesterday supported, and some would say drove, the equity action. This morning, however, November and December T-bill rates are ratcheting higher, suggesting that significant concerns remain into year-end.
 
Will this create yet another wall of worry for the markets to scale? Or is this a legitimate crisis that warrants attention at precisely the time investors have been conditioned to ignore it?
 
There is much to digest; let’s chew through some Random Thoughts.

R.P.

Twitter: @todd_harrison

Position in SPY.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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