6 Weeks

The markets went gaga for some well chosen and fermented words from the FOMC today. 6 weeks ago the SP future was 1339 and the country was being smacked with a heat wave and power outages. The 163,000 employment mirage for July had not yet been hallucinated.

We've said before that nothing changes peoples minds like price. The drive- by macro pontifications usually coincide with the latest data print and not heavily edited 6 week old gems. The Fed was/is considering turning the QE dial up to 11. Jawboning is part of quantitative easing. The SP future traded 1424 yesterday. Also up for your dining and dancing pleasure is balance sheet stable sleight of hand - Op Twist, MBS Twist- or balance sheet expanding LSAP. Fed credit cards and WKRP helicopter drops are further down the suggested list

The bottom line is we didn't get any new news today. God doesn't roll dice with the universe and the Fed doesn't day trade. Financial conditions have improved over the last 6 weeks and further extreme accommodation would demand a dissenter's resignation. The bond market used to be a beacon of light in an otherwise hazy landscape, no longer. Economics is now reverse engineered starting with the net change on the day.

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