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Random Thoughts: Fed Credibility

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Social mood remains a serious issue.

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  • We've spoken for years about the emerging crossroads of inflation and deflation. And here we are, the former storm swirling in things needed to feed and energize the world while the latter matter thumps through housing and slowing global growth.

  • The government opted for the devil they knew (inflation) in 2002 and let the dollar slide 40% but foreign holders of dollar denominated assets-and the inflationary implications for an already strapped consumer-have the Fed in a Box.

  • Investor psychology as it relates to the credibility of the Federal Reserve is massive through the lens of social mood and risk appetites. We spoke about this last summer and now more than ever, it remains the issue at hand.

  • Luckily, we've got Hoofy and Boo on the case. Click here to see an exclusive interview with our Federal Reserve Chairman. A little levity goes a long way!

  • The residual grist between opinions is where true education lies.

  • My Gawd, did Ben Bernanke really say that the dollar drop since 2002 has been the "unwinding of past gains?" The purchasing power of the dollar is down 97% since 1913.

  • Why is today's close important? The whole "lower high" thing. After breaking the uptrend from the March lows, we're close to starting a trend the other way. Sorta like Johhny Bravo's duds.

  • I'm gonna do the Baltimore SuperUncle thang this weekend and you know what? I'm gonna take the train...

  • If your Buzz blinks, hit F5 and yell ARMAGEDDON three times fast.

  • I've stopped myself from pressing the short side of crude three times today. Three times. OK, four times...

  • Almond Joy or Mounds?

  • Through the lens of risk rotation (and discipline), I pared some Halliburton (HAL) puts and front month USO puts into the opening abyss (I added out month USO puts into yesterday's liftage). Just trading, with alotta dry powder at the ready.

  • With a conscious nod that technicals are a better context than catalyst, BKX 75 can now be used as an upside stop for pure market positions. There is "tracking risk" naturally but if there wasn't some kind of risk, it would be called "winning" not "trading."

  • I can't get Stealers Wheel out of my head and it's freaking me out.

  • I can't decide whether I'm really excited or particularly scared that they've listed GLD options. I have a feeling I'm gonna traffic in these puppies once the markets settle.

  • The tape seemingly wants to rally-remember, it's Turnaround Tuesday-but unless the financials can get out of their own way, we're not going anywhere but down.

  • Lehman (LEH) is the obvious focus-ewww!-but Goldman (GS) holds the key. If Granny flips the downside switch, there ain't gonna be a whole lotta happy campers in Del Boca Vista at the early bird special.


R.P.

Positions in USO, HAL

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.

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.

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