PrimeRates Market Talk: Wall Street Screaming For Yellen

Written by: Jack Boylan

Oh, do they love them some QE (quantitative easing)! Janet Yellen confirmed Wall Streets hopes and fears with a nice batch of dovish comments yesterday. That promptly sent stocks higher as the morphine drip will continue indefinitely. Hoorah! While the ending to this unprecedented fed policy continues to be hazy, investors are not really worried about all of that–for now. Yellen seems determined to continue the current QE to infinity policies and that is fins and dandy for the traders. Of course, there are some who feel it is their duty to rain on the parade. Peter Schiff of Euro Pacific Capital couldn’t help himself and promptly hit the internet with some biting comments:

“I would like to see the truth come out of these confirmation hearings to discuss how completely clueless Janet Yellen was during the housing bubble,” Schiff suggests by way of warming to the topic. Not only did Yellen fail to see the crash coming, but she was dismissive of the dangers related to our over-leveraged housing economy even as Schiff himself was doing his best to alert the public. “She was wrong about everything in the past and I think she will continue to be wrong once she’s chairwoman.”

Heh. Well, what did you expect? Schiff has been famously warning about this QE stuff for a while and he now almost seems to welcome the disaster of his predictions:

Having learned nothing from the crisis Yellen will continue to print money until the long-anticipated currency crisis arrives and “brings an end to the madness,” he argues.

Well, let’s hope that doesn’t happen, at least not to the degree he (and others) seem to imply. Let’s face it a total collapse of the dollar will be an ugly, ugly outcome, no matter how much gold and silver one might have stashed away.

The data front will be light today, with industrial production and a couple of other fairly minor reports due. Nordstrom disappointed the Street last night as retail sales seem to be struggling across the board. JP Morgan is having more problems including a seemingly caught-red-handed deal in China. Their debt got downgraded by Moody’s, although they were joined by Morgan Stanley and Goldman. The Obamacare debacle will still be weighing on insurance investors today as Obama neatly tried to shift the burden to them on any future health plan fiascos. It’s a little early to sort it all out, but it seems unlikely that insurance companies are going to “win” any battles or sympathy for that matter. After all, they were right next to the president touting the new law all during its run-up and beyond. Getting thrown under the bus and acting surprised will do nothing but make the public wonder about the smarts of these people. Oh well, the whole mess will get sorted out sooner or later. The insurance companies may scream, but they also seem to be resigned to taking their lumps for the year. Next year might get very nasty however. We’ll see soon enough. In the meantime, the futures are flattish and it looks as if the morning will start out slowly for the markets.  Have a great weekend everyone!


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PrimeRates Market Talk: Wall Street Screaming For...

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