Betting On Yellen is Madness; She’s Insane

Traders are taking a huge gamble betting on the Fed to bail them out this afternoon. For the past two weeks, the Wall Street propaganda machine has been in full retard mode, trying to coax the Fed into adopting a “one and done” policy.

“Any reference to the volatility we’ve seen in the global financial markets, and the possible slowdown in Asia, is what the market’s going to be looking for,” said Gary Pollack, who manages $12 billion as head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York. “That’ll be key.”

Even before the January market turmoil, fed funds futures were pricing in just two rate increases by year-end. That’s shrunk to about one, and traders see around a one-in-four chance the Fed will raise rates at its meeting in March, data compiled by Bloomberg show.

“The belief is that international issues will prevent the Fed from doing the four rate hikes indicated” in December, said John Briggs, head of strategy for the Americas in Stamford, Connecticut, at RBS Securities Inc., one of the 22 primary dealers that trade with the Fed. Officials “are probably going to do as little as they can, so they don’t contribute to volatility in the market,” he said.

About a month ago, I said the market would crash until the Fed surrendered. Well, that’s exactly what transpired.

Reason dictates a rational response from the Fed. Since they hiked, China and oil have collapsed, with the former clownishly shedding $1.8 trillion in market cap. That has to be deflationary.

Copper has cracked. U.S. Steel and others cite an ongoing ‘industrial recession’ for their horrid plights. Even Apple is seeing some serious headwinds in the cycle.

Again, you’re assuming Janet Yellen is not insane. This is a woman who sent out her Fed heads to discuss her fucking ‘dot plot’ of 16 scheduled rate hikes from now until 2018, as the markets were cratering. It’s like she doesn’t own a television or read newspapers. She’s living in a vacuum, where submentals feed her Kansas Fed news only–always hawkish.

Judging her recent behavior and the actions of her board, I think she’s being punitive to Wall Street by design. I think she’s trying to decouple the Fed from the mood of Wall Street, hell bent on seeing rates “normalize”, despite the concerns of nearly everyone about the rate of change tightening aspects of going from 0% to 3% in a world wrought with nothing but deflation.

For my money, TLT is still my top pick.