Posts Tagged ‘ QE2 ’

Operation Twist – What the Fed May Announce Today and the Implications

September 21, 2011
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Operation Twist – What the Fed May Announce Today and the Implications

The Federal Reserve is likely to announce additional easing measures at the conclusion of the two-day Fed meeting today. Additional easing is anticipated by the market but there are a number of uncertainties related to the scope of what the Fed will implement. The most focused on initiative is called “Operation Twist” which is jargon for selling shorter-term Treasury note holdings (which are yielding a number of basis points which can be counted on one hand) and reinvesting the proceeds out the maturity curve. The action has the effect of increasing the duration of the Fed’s treasury holdings and effectively taking duration out of the market. The System Open Market Account (SOMA) is the account where Fed purchased securities reside. It has been estimated by Brian Sack’s New York...

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Bernanke’s Jackson Hole Speech: Market Could Close at 1,100 or 1,200 Today

August 26, 2011
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Bernanke’s Jackson Hole Speech: Market Could Close at 1,100 or 1,200 Today

The market remains destabilized which is quantified by the VIX index stubbornly remaining in the 40 vicinity. As long as the VIX remains in the 30-40 range investor should expect to see 2-3% moves both up and down in the market from these levels. I believe that the propensity for violent up moves is as probable as sharp selloffs because we are close to levels in the market where a recession is being priced in with a 50% probability. Today, with commentary coming from Ben Bernanke out of Jackson Hole, and a wide array of expectations on what he will indicate from a monetary policy standpoint I see decent odds that the S&P 500 closes at either 1,100 or 1,200 today. That is how destabilized and volatile markets have...

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