One reason why the financial markets reacted prior to Fed Chairman Bernanke's speech yesterday was that Mr. Bernanke's speech content was released -- in error -- more than 45 minutes too early! I know of one trader that lost more than $20,000 while he went to the restroom, due to the error.
I find it particularly intriguing that in reaction to Chairman Bernanke's speech, long bond rates of 10 years and more rose! The Fed promised lower interest rates, and bond rates went up! The yield curve is steepening, an ominously negative sign!
It is fascinating to me also that the more the Fed attempts to engineer a rescue of the financial house of cards, the greater the instability it creates in the markets! The Fed may deny reality, but the laws of true prosperity can not be denied! The collective wisdom of millions of people in the financial markets is greater than a few egocentric wise-guy plutocrats at the Fed, and they will act accordingly and appropriately in reaction thereto, in order to protect themselves. Do those Fed heads really think they can suspend the laws of economics forever?
I find it particularly intriguing that in reaction to Chairman Bernanke's speech, long bond rates of 10 years and more rose! The Fed promised lower interest rates, and bond rates went up! The yield curve is steepening, an ominously negative sign!
It is fascinating to me also that the more the Fed attempts to engineer a rescue of the financial house of cards, the greater the instability it creates in the markets! The Fed may deny reality, but the laws of true prosperity can not be denied! The collective wisdom of millions of people in the financial markets is greater than a few egocentric wise-guy plutocrats at the Fed, and they will act accordingly and appropriately in reaction thereto, in order to protect themselves. Do those Fed heads really think they can suspend the laws of economics forever?
