Is Deep Throat Going out of his Head?

T minus 8 hrs and counting...

And stocks rallied yesterday.....that recent 'sell off' only a distant memory....reclaiming all of the losses seen over the past couple of days - leaving the Dow, S&P and Nasdaq right back near the top of that sideways trading channel that we have been stuck in since early August.
So what is it? We're in, we're out, rates are going up, rates are going down, Economy is strong, economy is weak, wages are up, wages are down and it leaves your head spinning......

For those of us who remember1966 - Herb Alpert Presents: the incomparable Sergio Mendes & Brasil 66 - "Going Out of My Head" - What a great song - and the outfits - you gotta YouTube it.

But in fact investors and traders have taken this song and made it the battle cry as they sing:

'Well, I think I'm going out of my head, Yes, I think I'm going out of my head, Over You......Over You.... I WANT you to WANT me, I need you so badly, I can't think of anything but you.....'

You get it, right? And so - that is the way it is....the conversation has been dominated by speculation over what we will hear today....as so many have been unable to think of anything but Janet......Well - no need to wait any longer....in 8 hrs we will hear all about it.....but not to worry because John Hilsenrath - (WSJ Chief Economic Correspondent) otherwise known as 'Deep Throat' leaked word

"that the FED may continue to use the words 'considerable time' to describe when it may raise rates, but will qualify them"......

And not to be outdone - Peter Bockvar - MD at the Lindsey Group said that

"altering the line about 'significant underutilization' of labor resources would likely say more about the timing of an interest rate hike than removing "considerable time."

Full stop! At what point is this dissection of words and syllables gonna stop? Rates will rise - maybe March, maybe May, maybe July.....put on your big boy boxers on and deal with it.

The algo's will be waiting to see if the FED changes the following paragraph -

'The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.'

The theory is that if this paragraph stays intact, then it's off to the races....the computers will shift into overdrive and spew out BUY orders...Conversely if this paragraph is altered indicating that the FED is willing to remove the punch bowl (QE) and consider a monetary policy based on changing interest rates sooner, then the computers are likely to panic and hit the 'implode' button. I mean - you can't make this stuff up.....

The problem facing the FED is that the interest rate cycle IS overdue for an increase, but the FED cannot risk upsetting the financial mkts right now - no matter how much political pressure they might be getting.....Not when confidence is such an important factor in the US economic recovery, confidence that is tied to asset stability.

Now onto the PBoC (Peoples Bank of China) - what a move yesterday no???? Surprise liquidity injection - some $80 bil- to the top 5 Chinese banks - this to counter the slower than expected growth in the second largest economy in the world......

No coincidence that it is just ahead of the massive Alibaba IPO being priced tomorrow night for trading on Friday morning here at the Iconic NYSE....and with all of the investment banks creating massive hype - the Chinese gov't wants to make sure that there are no issues as the world watches the debut of 'mainstream China' onto the world's financial stage. And the plot thickens....

US futures are flat right now - but global mkts are all registering green following yesterday's US lead. China - as you would expect - moved higher after that 'subtle move' yesterday. European mkts all higher this morning and in London - all quiet on the western front as they inch closer to the Scottish Independence vote scheduled for tomorrow.

Mkt breadth continues to come under pressure and we seen the heavy lifters (big names) that are overweight in terms of price and emphasis manage to keep the indexes near their all time highs even while breadth continues to suffer. Leadership is becoming more and more narrowly focused. Currently 47% of the Nasdaq Composite stocks are down at least 20% from their recent highs while 40%+ of the stocks in the Russell 2000 index have dropped an average of 22% from their highs earlier this year.

Conversely only 6% of stocks in the S&P 500 have seen drops of 20% or more this year. Stock investors/traders have rotated into the momentum winners, chasing returns in an ever-more narrow group of stocks that help hold the index from collapsing – as the broader representation of shares fall into a bear market.
And the show goes on......

Linguine w/White Clam Sauce

Recall the famous Mike Damone line in the movie - "Fast Times at Ridgemont High" (1982)- and I quote :

"You never let on how much you like a girl.......and when ordering food, you find out what she wants, then order for the both of you. It's a classy move. Now, the lady will have the linguini and white clam sauce, and a Coke with no ice."

Here is that classic dish.....

Start with the clams - a couple of dozen or so should do nicely (in the shell) - wash thoroughly to remove any sand from the shell. Drain. In a saucepan - heat olive oil next add sliced and crushed garlic - sauté around until it takes on a nice golden hue.....add clams, S&P, a splash or two of white wine and cover. Reduce heat to med....continue to move the clams around to get them to open up. If you need a more juice - feel free to add a bottle of clam juice. (Never use a clam that is open before you cook it...capisce?)....At this time....remove some of the clams from the shell - return the clam itself to the sauce and discard shell - While keeping some in their shell for the presentation to come.


Put the linguine in the pot of boiling salted water to cook for 8 / 10 mins....or until aldente. Strain - always reserving a mugful of water.....return the pasta to the pot - add back 1/2 mug of water to re-moisten. Toss - wait a min or two and then add the clams and the clam sauce....re-toss and serve immediately in warmed bowls. You should have grated Romano cheese available on the table for your guests - although some Italians would cringe at the thought of putting cheese on a fish dish....but I gotta tell you - it is delicious!

Enjoy this dish with Sliced Italian garlic bread -

Buon Appetito.