{"id":21390,"date":"2013-07-29T09:43:23","date_gmt":"2013-07-29T13:43:23","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=21390"},"modified":"2013-07-29T09:58:57","modified_gmt":"2013-07-29T13:58:57","slug":"hand-off-to-a-new-fed-chair-is-well-timed","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2013\/07\/hand-off-to-a-new-fed-chair-is-well-timed\/","title":{"rendered":"Hand Off to a New Fed Chair is Well Timed"},"content":{"rendered":"

It is as notable as a 2nd term president handing off the big problems to the next guy, as George Bush did with Barack Obama in 2008; the changing of the guard at the Fed, that is.<\/p>\n

Alan Greenspan oversaw the making of a stock bubble in the final phase of the great bull market ended in 2000.\u00a0 He then instigated a credit bubble, which launched a housing bubble, made the credit hopped consumer feel wealthy and oh yes, built unsustainable distortions into the system through diced and sliced debt derivative vehicles of all kinds.<\/p>\n

Then in 2006 he deftly made the hand off to Ben Bernanke.\u00a0 Bernanke then dealt with the Maestro\u2019s second aftermath as it began cropping up in 2007 and now, nearly 4.5 years into a cyclical bull market that has another 6 months or so to run if it is to match the two previous cycles (not a given), it is time once again for a hand off.<\/p>\n

Obama eyes naming Fed pick within months<\/strong><\/a><\/p>\n

The poor shlep.\u00a0 Seriously, whether Larry Summers, Janet Yellen or some out of left field dark horse pick, the new Fed chief will probably end up with a mess to deal with.\u00a0 The S&P 500 is going up in lock step with the adjusted money supply that has been ramped due to QE\u2019s bond buying and monetization.<\/p>\n

Here is a chart from NFTRH 249 that shows this in glaring detail.\u00a0 Increasing 'taper' talk (let alone action) would probably not be helpful to the markets if the strong correlation holds.<\/p>\n

\"spx.base\"<\/a><\/p>\n

S&P 500 & Monetary Base Correlation<\/p>\n<\/div>\n

I believe that global Treasury bond supply\/demand dynamics and not the Fed will decide when the bond purchase program will end.\u00a0 From NFTRH 249:<\/p>\n

\"The decisions are being made for them.\u00a0 Why on earth do you think they are flip flopping around in the media about \u2018taper, no taper, maybe taper\u2026 dohhh!'?\u00a0 They are like day traders looking at a 5 minute chart.\u00a0 They are day trading a super critical macro economic concept.\"<\/p>\n

and\u2026<\/p>\n

\"If you believe that the Fed is not all controlling and currently enjoys the equal and opposite status to the bumblers they were perceived as in 2011, you might think that their stock has peaked, given the pressure that the bond market is starting to exert upon them.<\/p>\n

If the Fed\u2019s stock has peaked, what about its ability to keep the blue line spiking?\u00a0 If the blue line peaks, what about the maroon line?\u00a0 According to the chart above bulls remain Caught in a Dream:\u00a0 \"Thought I was livin'\u2026 But you can\u2019t never tell\u2026 What I thought was heaven\u2026 Turned out to be hell.\"\u00a0 <\/i>\u2013Michael Bruce, from Alice Cooper\u2019s classic album Love it to Death<\/i><\/b>.\"<\/p>\n

So we have some 'new Fed Chairman' drama to look forward to now in a market environment that always seems to have something to fixate upon in an age of extreme obsession with policy makers.\u00a0 The chart says that the Fed will only be popular as long as the blue line keeps rising.\u00a0 It does seem as though Mr. Bernanke\u2019s timing is just as good as that of his predecessor.<\/p>\n

Biiwii.com<\/a>, Notes From the Rabbit Hole<\/a>, Twitter<\/a>, Free eLetter<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It is as notable as a 2nd term president handing off the big problems to the next guy, as George Bush did with Barack Obama in 2008; the changing of the guard at the Fed, that is. Alan Greenspan oversaw the making of a stock bubble in the final phase of the great bull market […]<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1106,1247,1840,4273,7948,5378,5381,4785,5379,3355,5380,4975],"class_list":["post-21390","post","type-post","status-publish","format-standard","hentry","category-general","tag-alan-greenspan","tag-ben-bernanke","tag-biiwiicom","tag-gary-tanashian","tag-guest-bloggers","tag-new-fed-chair","tag-new-fed-chairman","tag-notes-from-the-rabbit-hole","tag-president-bush","tag-president-obama","tag-taper-talk","tag-the-federal-reverse"],"yoast_head":"\nHand Off to a New Fed Chair is Well Timed - INO.com Trader's Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2013\/07\/hand-off-to-a-new-fed-chair-is-well-timed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hand Off to a New Fed Chair is Well Timed - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"It is as notable as a 2nd term president handing off the big problems to the next guy, as George Bush did with Barack Obama in 2008; the changing of the guard at the Fed, that is. 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