tag:blogger.com,1999:blog-1390332969136161956.post991213944649657304..comments2023-07-02T06:55:31.510-07:00Comments on Animal Spirit Forecasts: 5/6 Weekly CommentarySteve Koteleshttp://www.blogger.com/profile/07995142353788940838noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1390332969136161956.post-20708251049448068482011-05-09T06:59:52.322-07:002011-05-09T06:59:52.322-07:00Charles,
It will be hard to just hand the Treasury...Charles,<br />It will be hard to just hand the Treasury a bill for $150 billion. The Tea Party/Ron Paul would have a field day.SteveKotelesnoreply@blogger.comtag:blogger.com,1999:blog-1390332969136161956.post-58081920385429998982011-05-08T21:00:59.415-07:002011-05-08T21:00:59.415-07:00Steve,
Excellent commentary. I had two points on i...Steve,<br />Excellent commentary. I had two points on it:<br />1) John Hussman at hussmanfunds has an interesting article about just what you were talking about...to raise rates from the 0-.25% to a more "normal" 1-2% would require undoing all of QE2...the point being that unwinding the monetary base is incredibly front-loaded as rates increase.<br />2)The Fed has now changed their accounting so that if they end up with negative equity, they just enter it as a negative showing as money owed to the Treasury. So, it might take a bit before that has the ramifications that it should. <br />On the counts: Every big thing i track shows a May sell at the end of the month depending on how we close the months, the S&P needs to close over 1325-7 but everything is set since we recorded those new highs. Small/mid caps and developed international all look the same. I need to look back in history but I havent ever seen this set up on a monthly basis in the last 30 years. We had a very similar setup on the weeklies right before the flash crash.<br />CharlesCharlesnoreply@blogger.com