Okay - we knew this was coming but one day after the big FOMC announcement! Please, give me a break! What I am referring to is the new "call" from Goldman Sachs that Tapering will now start in December of this year. Yes, you read that right.
Remember, it was Goldman who just a short time ago came out with a prediction of a $10 billion "dovish" tapering (their words) in September and thus advised clients based on that to buy all dips in the US equity markets and the conditions for rising stocks would still remain in place in that sort of easy money environment.
Well, lo and behold this morning news greeted me that Goldman was predicting a Fed Tapering beginning with the December 18 meeting of the FOMC. They commented that there would be insufficient data at the October meeting to change the Fed's newly announced NON-TAPER but by December this year the Fed will move. They also are predicting a complete end of the program by September 2014.
This should be interesting to watch unfold to say the least. Goldman, as well as a lot of other large firms, received a major black eye as they completely misread the Fed. I guess watching stocks soar to new all time highs however is some pretty damned good consolation for them all!
By the way, give credit to those guys who did call for a non-action on the part of the Fed over at King World News, especially Egon for going out on a limb like he did.
I can tell you one thing as a trader - I simply get out of markets before major announcements like that. I can suggest possibilities but that is just what they are, possibilities. Trading on a guess is a quick way to the poor house. If you get it right - you are a hero. If you get it wrong, your account becomes a zero. That is not trading; it is gambling and there is a world of difference between the two things.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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