Same Muslim Brotherhood the Obama administration has been meeting with and said it would be “satisfied” if they won the upcoming elections. (Ynet) — A Muslim Brotherhood rally in Cairo’s most prominent mosque Friday turned into a venomous anti-Israel protest, with attendants vowing to “one day kill all Jews.” Some 5,000 people joined the rally, called
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Egypt: Muslim Brotherhood Rally In Cairo’s Top Mosque Vows To “One Day Kill All Jews”…
If you were watching capital markets closely yesterday, you saw a phenomenon that has rarely been seen before. I certainly never have. And it was linked to the Federal Reserve’s policy statement, released about 2:15pm Eastern time. This was an extraordinary statement, containing several rarely-seen features. The first one, of course, was the commitment by the Fed to keep policy interest rates at or near zero until the middle of 2013. Never before to my knowledge has the Fed put a specific schedule on its interest-rate guidance. The expectation by market participants has been that the Fed would start raising rates as soon as economic conditions (notably unemployment) improved, and they could argue over the timing. Yesterday, that changed. Any interest rate is the risk-adjusted sum of a series of shorter-term interest rates. When the Fed says that policy rates will be zero for the upcoming 24 months, they’re effectively telling the market that the interest rate on the two-year Treasury note is also zero. That had an instant effect on the capital markets. It jacked the whole front-end of the yield curve down by nearly 30 basis points. The two-year note briefly traded at a record low yield of about 16.5 basis points. The 10-year note, which had been yielding about 2.30% at 2.15pm, suddenly zoomed upward in price, its yield plunging to an all-time low just above 2.03%. All this happened in a matter of minutes. It was possibly the wildest move in rates that I’ve ever seen. And of course, the stock market followed rates lower, dumping about 350 Dow points in about 30 minutes. What happened next was remarkable. About 2:45pm, rates suddenly reversed, and stocks came with them, leaping about 600 Dow points to close the session with solid gains. The two-year note finished the day yielding about 20 basis points, an all-time low, and the 10-year finished about 2.24%. After the close, talking heads rushed to explain the sudden reversal by saying that traders took half an hour to digest the Fed’s statements and decide that it was all good news after all. I’m not buying that. You don’t really have time to think when the 10-year note is racing up to an all-time low yield. The shape of the tape yesterday afternoon just has the classic look of panic buying, followed by a panic reversal. It simply makes no economic sense for the 10-year yield to be near 2%. I also surmise (without direct evidence) that a lot of short covering went on in the final hour of stock trading yesterday. Was it a “flash crash”? I doubt it. From what we know about flash crashes, they’re characterized by a withdrawal of liquidity as computer algorithms suddenly yank out their bids in market turbulence. But it looks to me that the rally in notes led the collapse in stocks. Lack of bids wasn’t the problem. The other critically important aspect of the Fed’s announcement yesterday speaks to a new recognition that the problems faced by the US economy are structural in nature, rather than cyclical. This isn’t a garden-variety recession characterized by demand inadequacy, that can be alleviated with government stimulus spending. This is something different. The Fed is silent on what the difference is. But if you’ve been reading me here at RedState for the past three years, you already know what I think: the consumer sector has to rebuild its personal balance sheets after the housing-bubble collapse. Individuals are trying to deleverage, a process that will reduce demand relative to trend for several years yet to come. Deleveraging is secular, not caused by politics. But another major headwind in the economy comes from uncertainty among business people about future policy and regulations. It’s no exaggeration to say that the current Administration is the most anti-business in many years. Every time the President of the United States opens his mouth, he talks about raising taxes on business and capital. If you’re responsible for business investments and you have a pretty good idea that your future successes will be punished by higher taxes, wouldn’t you feel discouraged? The bottom line is that structural changes in the global economy (including the still-huge problems in Europe) are needed to get things moving in the right direction again. A few hundred billion dollars in stupid stimulus spending isn’t going to do it. My interpretation is that the Fed is finally acknowledging this. One more point, and this is something I’ve stressed repeatedly in private communications lately: we are NOT facing an imminent financial crisis in the manner of the disorders of 2007 and 2008. The liquidity impairments in interbank markets just aren’t there. The stock market in my view might yet have some way to fall, but we’re not at the edge of a meltdown. And the S&P debt downgrade is basically immaterial to the markets. But that’s a story for a different post. And if you want an intensely contrarian market call, look at the 10-year note. No less recently than the last week of July, it was yielding over 3%. It’s had a simply incredible rally over the past two weeks. This rally might partially reverse over the next few weeks or months.
See original here:
The Fed Gooses the Capital Markets
If you were watching capital markets closely yesterday, you saw a phenomenon that has rarely been seen before. I certainly never have. And it was linked to the Federal Reserve’s policy statement, released about 2:15pm Eastern time. This was an extraordinary statement, containing several rarely-seen features. The first one, of course, was the commitment by the Fed to keep policy interest rates at or near zero until the middle of 2013. Never before to my knowledge has the Fed put a specific schedule on its interest-rate guidance. The expectation by market participants has been that the Fed would start raising rates as soon as economic conditions (notably unemployment) improved, and they could argue over the timing. Yesterday, that changed. Any interest rate is the risk-adjusted sum of a series of shorter-term interest rates. When the Fed says that policy rates will be zero for the upcoming 24 months, they’re effectively telling the market that the interest rate on the two-year Treasury note is also zero. That had an instant effect on the capital markets. It jacked the whole front-end of the yield curve down by nearly 30 basis points. The two-year note briefly traded at a record low yield of about 16.5 basis points. The 10-year note, which had been yielding about 2.30% at 2.15pm, suddenly zoomed upward in price, its yield plunging to an all-time low just above 2.03%. All this happened in a matter of minutes. It was possibly the wildest move in rates that I’ve ever seen. And of course, the stock market followed rates lower, dumping about 350 Dow points in about 30 minutes. What happened next was remarkable. About 2:45pm, rates suddenly reversed, and stocks came with them, leaping about 600 Dow points to close the session with solid gains. The two-year note finished the day yielding about 20 basis points, an all-time low, and the 10-year finished about 2.24%. After the close, talking heads rushed to explain the sudden reversal by saying that traders took half an hour to digest the Fed’s statements and decide that it was all good news after all. I’m not buying that. You don’t really have time to think when the 10-year note is racing up to an all-time low yield. The shape of the tape yesterday afternoon just has the classic look of panic buying, followed by a panic reversal. It simply makes no economic sense for the 10-year yield to be near 2%. I also surmise (without direct evidence) that a lot of short covering went on in the final hour of stock trading yesterday. Was it a “flash crash”? I doubt it. From what we know about flash crashes, they’re characterized by a withdrawal of liquidity as computer algorithms suddenly yank out their bids in market turbulence. But it looks to me that the rally in notes led the collapse in stocks. Lack of bids wasn’t the problem. The other critically important aspect of the Fed’s announcement yesterday speaks to a new recognition that the problems faced by the US economy are structural in nature, rather than cyclical. This isn’t a garden-variety recession characterized by demand inadequacy, that can be alleviated with government stimulus spending. This is something different. The Fed is silent on what the difference is. But if you’ve been reading me here at RedState for the past three years, you already know what I think: the consumer sector has to rebuild its personal balance sheets after the housing-bubble collapse. Individuals are trying to deleverage, a process that will reduce demand relative to trend for several years yet to come. Deleveraging is secular, not caused by politics. But another major headwind in the economy comes from uncertainty among business people about future policy and regulations. It’s no exaggeration to say that the current Administration is the most anti-business in many years. Every time the President of the United States opens his mouth, he talks about raising taxes on business and capital. If you’re responsible for business investments and you have a pretty good idea that your future successes will be punished by higher taxes, wouldn’t you feel discouraged? The bottom line is that structural changes in the global economy (including the still-huge problems in Europe) are needed to get things moving in the right direction again. A few hundred billion dollars in stupid stimulus spending isn’t going to do it. My interpretation is that the Fed is finally acknowledging this. One more point, and this is something I’ve stressed repeatedly in private communications lately: we are NOT facing an imminent financial crisis in the manner of the disorders of 2007 and 2008. The liquidity impairments in interbank markets just aren’t there. The stock market in my view might yet have some way to fall, but we’re not at the edge of a meltdown. And the S&P debt downgrade is basically immaterial to the markets. But that’s a story for a different post. And if you want an intensely contrarian market call, look at the 10-year note. No less recently than the last week of July, it was yielding over 3%. It’s had a simply incredible rally over the past two weeks. This rally might partially reverse over the next few weeks or months.
Read the original post:
The Fed Gooses the Capital Markets
On Tuesday, across the state of Pennsylvania, unions and other Left-wing organizations will be boarding buses and heading to the state capitol in Harrisburg to engage in a mass rally to fight for economic and social justice and against budget cuts. The rally, is being organized by the Coalition for Labor Engagement and Accountable Revenues (CLEAR) which is comprised of government unions, such as AFSCME, the American Federation of Teachers (AFT), PSEA (part of the NEA), SEIU, as well as the AFL-CIO, IAFF, UFCW and others. The economic agenda of the rally organizing group CLEAR consists of raising taxes on consumers and retailers, internet shoppers and vendors, corporations and, of course, the wealthy. CLEAR is clear, they do not want any cuts in spending. Also in attendance will be a diverse group of other organizations, such as: Just Harvest , a community-organizing group that has been “sowing the seeds of economic justice since 1986″ Pittsburghers for Public Transit Disability Rights Network of Pennsylvania In addition, there will be elementary schoolchildren bused in from all over the state. In Lancaster, PA, concerned parents contacted the local newspaper with their concerns , which caused one school to cancel the “field trip”: Plans to have Wickersham Elementary School students participate next week in a rally opposing cuts in the state education budget have been canceled in the wake of complaints from parents. The school Wednesday sent home a permission slip asking parents to allow their children in grades three to five to attend the Rally for a Responsible Budget in Harrisburg Tuesday. [snip] “ The fact that they’re taking kids and teachers out of school to attend this rally is just plain wrong ,” said Julie Zug, whose son is a fourth-grader at Wickersham. “I have no idea how many schools or districts in Pennsylvania are participating, but it sounds like an awful expense to prop up the teachers’ union. “ How many parents are unaware their kids are being used in this manner ?” The rally is being sponsored by the Coalition for Labor Engagement and Accountable Revenues, a group that includes the Pennsylvania State Education Association, the American Federation of Teachers and several other public-service unions that are planning to bus hundreds of members to Harrisburg. In a letter to parents accompanying the permission slip, James said the trip would provide an opportunity to “model the role of good citizenship, free expression, fairness and thoughtful deliberation.” “Please join us as we … travel to Harrisburg to let our voice be heard for a responsible budget for public education,” he urged parents in the letter. In addition to the permission slip, the school sent home a sample letter for parents to send to lawmakers opposing education funding cuts, as well as a sample script for parents to read when calling their legislators, according to parents. It’s unknown how many parents will be having their children be used as a government-union prop. What is also unknown, as referenced above, is the number of parents who may not know that their children are being used as government-union props next Tuesday. _________________ “I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776 X-posted .
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Pennsylvania’s Schoolchildren To Be Used As Props At May 3rd Leftist-Union Rally
Yesterday, as in states around the country, another union protest took place. This time, the public-sector union members crowded around and chanted in Annapolis, Maryland—a state that has no chance of reforming the monopoly that public-sector unions have on its government. In attendance were up to 15,000 union activists, according to an AFSCME spokesman who helped organize the protest. Among the speakers at the rally was AFL-CIO top boss Richard Trumka, who hit the highlights of his usual class-warfare stump speech : “Madison is just the beginning, this right here is only the beginning, you ain’t seen nothing yet,” said Trumka before an energized and cheering crowd. “Scapegoating teachers and public workers is bad policy and it’s flat a** wrong.” Trumka said the larger fight remains between the “haves” and the “have nots.” “When the rights of workers in one state can be stolen, all of us should feel a little less secure,” said Trumka. “This is about the corporate CEO agenda that equals more, more, more for them and less, less, less for us.” With labor battles sprouting up throughout the midwest, Trumka remained optimistic that the people will prevail. “Together, we’re a movement,” said Trumka. “We stand for our children and grandchildren, and tonight, you have been heard.” That Maryland is controlled by Democrats and that the budget cuts the protesters were protesting have been proposed by Democrats was apparently lost on the protesters, as well as Trumka. Especially as the keynote speaker of the evening was the very governor proposing the cuts: Democrat Governor Marty O’Malley. As noted by the Maryland Reporter : It was a bizarre finale to a rally that brought thousands of state workers and teachers to Annapolis to protest cuts in pensions, retirement benefits and pupil spending. The last speaker was none other than the man who had triggered the rally by proposing the cuts: Gov. Martin O’Malley. “I don’t like this budget either,” O’Malley said in a short speech. He was met by cheers, some grumbling, and the evening’s chant of “Keep the Promise.” He proclaimed his strong support for collective bargaining rights for public workers. “Our state is not like other states,” the governor said. “You will not find in Maryland the sort of Midwestern oppression that you find in Ohio and Wisconsin.” The mixed messages at the rally were a sign of the co-dependency between the public officials who rely on teachers and unions for their base of support and the public employee unions that rely on the governor for their funding. A “mixed message” is an understatement. With a governor bashing other states’ solutions to the mess public-sector unions and their political puppets have helped create by gaming the system, O’Malley’s pandering to the union crowd is nothing less than hilarious hypocrisy. _________________ “I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776 Cross-posted on BigGovernment.com .
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Twilight Zone: Maryland’s O’Malley Keynotes Union Protest of His Own Budget
