I think Alasdair Macleod provides an interesting take on the taper announcement. To wit:
-The reduction was a token amount and the fact that it sliced away at MBS and Treasuries equally suggests that the decision was one to “pluck a figure out of the air”
-Even if the QE policy was reduced in scope, the commitment to ZIRP remains. And, therefore, implicitly a commitment to providing as much liquidity as needed to keep rates suppressed. Doesn’t that make the two policy announcements a bit contradictory? Or, better yet, QE meaningless in the context of whether or not the Fed must continue to be out in the market buying and selling lots of securities?
Here’s another interesting link – the gold ain’t there.
Speaking of Obamacare, one more requirement has been waved by fiat – namely, the deadline for people who had policies cancelled to sign up or else endure a penalty. This thing is becoming the disaster that keeps on giving. But, the best part is the closing line of a very snarky article: “And the punchline: With only days before the Monday deadline to sign up for coverage that starts Jan. 1, insurers are facing a much smaller, and sicker, pool of customers than hoped for. Like we said: anything that can go wrong... oh look, over there, the Stalingrad & Propaganda 500 just hit a new all time high!”
In Mark Hanson’s latest, he lays to waste the idea that housing is more affordable now than it was during the bubble years since rates are lower and prices are still beneath the highs. The reality is that the exotic financing of yesteryear that allowed people to buy with no money down and no income is gone. Today, the great majority are doing 30-year fixed terms, and the monthly payments are about as high as they have ever been. Factor in at least 20% down, and you should ignore the prior highs on Case-Schiller as to where things could go.
