Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Minyan Mailbag: Conflicting Market Signals and the Fed


As the various pockets of debt one by one implode, the Fed must decide whether to let the real doctor, the markets, cure these ills.


Mr. Practical,

As Toddo noted in
his morning missive, the dollar has cracked long-term support. Any thoughts as to where it goes next?

Any and all opinions would be most appreciated.

Kind Regards,
Minyan Alex

Mr. Practical,

Maybe you can make sense of this because I sure can't.


  • Collapsing treasury yields
  • Narrowing TIPS spreads
  • August employment number
  • Housing market
  • ABCP and other pressure points in credit markets.


  • Crude at all-time highs
  • Gold near multi-decade highs
  • Wheat and other commodities surging
  • Dollar near all-time lows
  • The Fed and government ready to act
  • China

Somewhere in between: stocks.

I am not sure what it means, but I don't think all these markets can be right.

-Minyan C

Minyans Alex and C,

It seems to me we are at the inflection point.

As central banks try to control the damage of what they helped create (control it by creating more), it is game time for the Fed. Of course it is an incrementalist and will try to lull the markets into believing it's business as usual, but these times are anything but usual.

As the various pockets of debt one by one implode, the Fed must decide whether to let the real doctor, the markets, cure these ills. The medicine will be like chemo-therapy: it will almost kill the patient. If it decides to do this, it will not lower Fed Funds. This will clearly signal to the markets that years and years of artificial debt creation is finally over, that there is too much debt, and it is up to the markets to get rid of it. The dollar will rally or at least stop going down.

Of course everyone doubts it will do this. That is why the dollar is cracking, gold and oil are rallying, and stocks are confused.

No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos