Janet says: 'Assume the Position'

So yesterday Janet came out swinging - admitting that the world is on the edge or a recession saying:

"Given the risks to the outlook, I consider it appropriate for the committee to proceed cautiously in adjusting policy.....the key is that the global economic and financial backdrop looms more threateningly now than before.........and even though officials expect the US economy to weather any further rough patches, the dangers can't be ignored"

Let me be clear - she did NOT give any details on timing whatsoever and now the feeling is that if we get any rate rise at all - it will just ONE and it may not be in June....So we can forget all the chatter about 'multiple increases'.... and should the economy take a turn for the worse - she assured the invitees that the FED could still take steps to resuscitate the economy - think 'forward guidance' (which is just another word for Jawboning - which is what she did yesterday as she 'guided' expectations), the other trick up her sleeve would be the launch of an ECB style bazooka..... but either way - she put the idea of any increase to bed and she essentially told the 5 non-compliant FED mouthpieces to 'assume the position' and prepare to get spanked for insinuating last week that rates are due to rise in April -

.......And the mkt roared! Investors and traders immediately hit the BUY button on their computers sending the S&P up 17 pts or 0.8% and the Dow up 97 pts or 0.6%.....

Remember - last week - CNBC.com ran with a headline article about how "Fed Chair Yellen has a mini revolt on her hands" as 5 FED presidents took to the airwaves to suggest that the FED was falling behind the curve and that the mkt (and investors) should expect rates to rise in April. Now it appears that Janet was not happy about that development - And whether or not there is a bit of dissension in the ranks - as the French proverb goes: "Il faut laver son linge sale en famille" ......or "Never wash your dirty laundry in public".... and that is what they were doing.......washing their 'dirty laundry' for all to see in the name of 'transparency'. And what does that transparency show - it shows a complete mess within the ranks as no one really knows what to do....so staying the course appears to be the best answer for now.....Oh boy.....this story gets more interesting as the hours tick by.....

I am beginning to re-think this whole transparency issue - Is it in fact the best thing for the mkts? Does it create more angst and instability for investors and traders? Would Paul Volker ever run the FED like this? (A: NO) Does the FED secretly want more instability to keep everyone guessing? As far as I am concerned - they can do what they want 'behind closed doors' but once they open those doors and the FED chair speaks then that should be it. Period the end. Whatever happened to loyalty? This business of then letting everyone in the FED run hog wild over any network that will have them is getting a bit exhausting. Because in the end - what does it really accomplish besides mass confusion and mkt instability? It is not helpful for investors nor businesses that are trying to plan for the future - it also does not help the individual as he/she plans for the future. The constant sense of angst concerning (global) monetary policy is unnecessary - and quite honestly has created a global monster...Just look around the world and tell me what you see....

I think the worst part of all this is what are we really talking about? 25 bps?
Moving rates from an absurdly low level to another absurdly low level? I mean we are talking about going from 0.05% to 0.75%....not from 4% to 5%. And still this tiny move is creating all of this drama.....For those of you too young to remember 1982 - let me remind you....rates were 21% , the Dow was trading at 792 - and then on Tuesday Aug 17th - Chair Volker cut rates by 10% or a full 2%age points when he decided to take the bull by the horns and do something dramatic.....He took rates down to 19% - and the world celebrated, the mkt surged by 4.5% on that day......volumes exploded and the greatest bull mkt of our lifetime was born....... THAT WAS DRAMATIC! (But that was a different time......Ronald Reagan was president and America was on the verge of an incredible resurgence...)

Once again - let's point out how legislators have done zero to assist the FED by being creative and pro-active with fiscal policy....But that's another story - one that we see unfolding right in front of us via the Presidential election......People are disgusted and rightly so.....Does anyone in DC understand that?

Overnight - stocks rallied - (duh), credit mkts rallied, commodities (think oil) rallied and the dollar continued to slide lower - extending its worst month in 5 yrs. The VIX also moved lower - sliding 9% taking it to its lowest level of the year.....what does this mean? It means that there is a fair amount of complacency in the mkt - no real sense of fear...of course not - Janet has once again tucked it tightly in bed - kissing it on the head, saying 'Mommy loves you... now go to sleep'..... and this is right in front of what is expected to be a weak earnings season.... so the plot thickens.

Stocks in Asia and Europe shot higher on the news....with the exception of Japan that got hit with a huge drop in Industrial Production - sending the Nikkei down 1.5%. Hong Kong +2.15%, China + 2.77% and the ASX +0.1%.

European mkts following in lock step with Asia and the US....FTSE +1.7%, CAC 40 + 1.9%, DAX + 1.7%, EUROSTOXX +1.6%, SPAIN +1.5% and ITALY + 1.45%

US Futures are up another 11 pts in pre-mkt trading......taking the futures index up to 2060.....which will send the cash index up to 2067 if this holds.....I suspect that 2075 should be another level of resistance - but anything is possible now.... Eco data today includes Mort Apps which fell by 1%, and the ADP employment report which is due to show an increase of something approaching +195k jobs.....

We will be entertained by one FED speaker today.....Chicago's own Charlie Evans.....(an admitted DOVE). He will be on CNBC Squawk box at 8:30 just after the ADP release, he will also be speaking at the Forecasters Club of NY at 1 pm.

Remember that this is end of month and qtr...so a rally would do so many people so much good - especially ahead of April 15th....(Tax day)..... Either way -

Seared Halibut

Begin with 4 / 6 pieces of halibut. (with or without the skin - depends on what you like)

On med heat - Add - 3/4 stick butter, a bit of olive oil and 2 sliced shallots...sauté shallots until soft 3 / 4 mins. Add sliced artichoke hearts and sauté with the shallots - 3 / 4 more mins........turn up the heat and Add halibut and sear on one side...flip the halibut - and then bathe in white wine ...bring to a boil, then reduce heat to med low & cover and steam for 10 mins....test to make sure the halibut is cooked to perfection....

*Artichoke hearts can be frozen or if canned - just rinse and slice in half.

Serve - on a warmed plate - with steamed French cut green beans seasoned with olive oil, salt and pepper and roasted butternut squash. As always include a mixed green salad dressed in a red wine Vinaigrette. The colors of the veggies (green and yellow) accented with the whiteness of the Halibut make for an eye appealing - sensory stimulating presentation


Buon Appetito.