Gold, silver, treasuries and the dollar closed up, while stocks knifed lower.
As you were.
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gun to my head: if bernanke’s statement is benign, a nothing comment, the mreits will be a great buy.
if he says “massive new buying program”, I have mixed feelings, but long oil would be a decent idea. if he says no QE3, the economy is fine, I have mixed feelings and wouldn’t be surprised to see panic OR a “(buy) the news reaction, (buy) meaning nobody is happy about it but its already backed in”.
I don’t know that anybody has an edge going into tomorrow. Do I think that Ben realizes that a levitating stock market is good for the economy? absolutely, he’s one of the smartest cookies in the pack. Do I think he genuinely wants a good outcome? Absolutely.
But do I think ultimately he yields to political pressure and says “nothing”, then leaves the stage to obama to announce some wild stimulus in about a week and 3 days from tomorrow? yes. thats what I think is most likely: bernanke yielding to obama and setting the stage for an early september stimulus announcement.
Gun to my head? The repubs, who control the house, are trying to tank the economy to win the white house in 2012, and know fully well that to turn the economy around they will need to run fiscal stimulus… that isn’t that hard to figure out. but for now are going all “tea party” to tank the lives of 5 billion people vis the US economy, just to win. So they will fight it… And,
wildest statement made in public to date about this all: they then find a way to spend money OFFF BALANCE SHEET, to stimulate in 2012 when they win. It wouldn’t be that hard for them to do… And their behavior is… just that far out there lately.
The Fed has all the bullets in the world, but it would take some creative legal thinking for them to realize it. They CAN make some meaningful differences, but its buried in Dodd Frank, … What they say should profoundly affect the behavior of mreit stocks, one way or another…
SKIFFLAGE!
+++++++
Ftw!