Sep 21

Tonight should be a turning point…either way

With the Federal Open Mark Committee (FOMC) currently meeting, many pundits are expecting a very very big package to be announced by Ben Bernanke tomorrow. If its not what the market expects, then I imagine there’ll be more equity market pain but if it is big, then I’m confident we’ll see a strong market (so a purchase of both put and call option appears to be an appropriate strategy).

Given Obama has little to no chance of getting anything decent through the Republican controlled congress, inflation is a non-issue, Ben has the freedom to try something innovative and big and he appears to be the only US option left. In terms of being innovative…could be another QE3 at the long end of the yield curve or even a concentrated monetary expansion where he buys bonds of a specific non-government securities.

Either way, I still believe the European debacle is the biggest issue and it will have no impact on solving that.

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