Steering Clear of the Fed
Dollar bills yo. Yo, dollar bills. The Fed raining dollar bills on this market until the unemployment rate moves under 6.5%. Of course, if and when the unemployment rate reaches that point, if the economy isn't doing better, then what will the Fed tie interest rate policy to at that point? The Jets winning the Super Bowl? At least then we know it really is an infinity of easing. I don't like Fed days. I really don't. Too much whipsaw and overreaction.
I will say the long bond reaction has been very favorable for the U.S. long bond straddle. The iShares Barclays 20 Year Treasury Bond Fund (TLT) has significantly increased its probability of reaching $117.50. I'm looking at a January put combination trade on this one to tack on the straddle, but I want to wait until late in the day. I don't want to get in front of Bernanke's press conference....263 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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