The Fed – Do As I Say Not As I Do

What “is” wrong with me?

Have I become so crotchy and skeptical as to actually consider next weeks FOMC meeting as yet another “wonderful opportunity” for the Fed to “yet again” pull a fast one the unsuspecting and “all too trusting” American investor?

They said they where going to taper “last time” ( as the Fed “should” be trusted to give guidance on its plans moving forward ) with every analyst and talking muppet on T.V talking it up as if it was an absolute “given”. Then “blasted” anyone and everyone who may have been “preparing” by “not tapering”. The Fed lost what little credibility it still had, and many lost “mucho”.

Am I insane? Have I lost my mind?

Would I be completely out to lunch considering that there is just as likely a chance “this time” that the Fed ( in the current scenario with the massive blow over the debt ceiling, government shut down and still terrible employment data) has everyone assuming “it’s impossible to taper” ( which in theory it is) and “once again” finds opportunity to screw the lot of you?

“Fed announces small 10 billion tapering of bond purchasing program” and the markets go crazy….(Only to then INCREASE QE a month later and catch everyone again)

Or even better……”Fed announces INCREASED QE” Straight Up! Boom! Bet you didn’t see that one coming!

You can see where I’m going with this. It’s long past ridiculous, and “non of the above” would surprise me “any more” than the other.

The Fed’s involvement ( or lack of ) in today’s markets is unpresedented, and weilds such influence that getting it wrong could prove disasterous.

I KNOW what the Fed is going to do , but week to week, minute to minute –  NO ONE KNOWS what these weasels are going to “say” they are going to “do”.

My gut has me thinking that “no matter what the outcome” to the FOMC meeting here wrapping up Tuesday, the market is gonna “pop” on news….and sell like hotcakes. I’d have every confidence that we are “lower” looking a week out. I’ll get these trades lined up as they come.

13 Responses

  1. devilyell October 26, 2013 / 5:10 pm

    Hi Kong.

    Kool komments, and I agree.
    They may continue whistling past the grave yard. I am waiting patiently at their grave side.

    BTW, the RBA has been very kind to us. I hope everyone got a chunk.

    • Forex Kong October 26, 2013 / 5:59 pm

      They just keep pulling the strings don’t they?

      And yes…..the AUD as well NZD shorts have been a couple of the best trades I’ve had play out in the last several weeks!

      This market really has you working for it…..really digging to find those move wow…….

      Good thing I love doin it as…..it could drive a person mad.

  2. Harold Cow C October 26, 2013 / 10:14 pm

    Are you expecting that they might just really reduce QE.
    Please be mor. Explicit in your post,

  3. Andy Jackson. October 27, 2013 / 4:27 am

    If countries where brilliant at balancing their books and their “Ducks were in a line” we’d have nothing to cringe at, Nothing to blog about and the charts would be flat. Fortunately for us they’re sooooo not. All this mentalnessness 😉 is part of my life now and I get a kick out of creaming it.
    I’m waiting for China to get fed up (and they will), pick their ball up and start spreading their debt elsewhere. Kong – I/we will need our hand holding thro that episode mate. Cheers in advance.

    • Andy Jackson. October 27, 2013 / 4:32 am

      When I said debt I meant risk. Pardon me.

  4. JSkogs October 27, 2013 / 7:39 am

    I’m generally in the QE forever camp but since the US is starting to catch flak over its debt management I could see a very small (5 or 10) taper announcement to take place out a bit. Or do nothing at all.

    I hope everyone is having a nice weekend!

    • Forex Kong October 27, 2013 / 1:47 pm

      Me too Jman as I’m 100% positive the Fed cannot stop printing.

      But as the post suggests….we can “know” what they are gonna do……but surely can’t predict what they are gonna “say” thay are gonna do – right?

      What a market. What a gong show.

  5. David October 27, 2013 / 1:32 pm

    Interesting post Kong.
    I’ve had the sneaking suspicion that since “everyone” is saying there’s “now way” the fed will taper at this meeting (and likely won’t until Spring ’14, if ever), that they just might very well catch everyone by surprise. The dollar is really low right now and there is huge short interest. What a way to pull the carpet from under those EUR longs eh?

    With that said, I’m sure they won’t taper and will slowly add to my EUR/USD short. It’d be nice to hit the “Jackpot” this week if they do taper though!

    • Forex Kong October 27, 2013 / 1:44 pm

      Nice level headed approach David…as I’m of similar thinking.

      I’m positioned “USD long already” and will build on this regardless of what the next couple days bring.

      The post was aimed at those “with blind faith” and perhaps even those that don’t even realize what a “betrayal”the last Fed move was.

      I can only assume the vast majority of “arm chair investors” are still of the mindset that “the Fed has got your back” and things will just “go up forever”.

      The risks are just too great on either side of the coin getting it wrong with any amount of money at stake….thusly – I’m still trading at half mast.

    • JSkogs October 27, 2013 / 11:19 pm

      Ya nice comment David. Funny I just took a small eurusd short tonight and then read your comment with glee. Enjoy the night all. Big week ahead

  6. PT October 27, 2013 / 3:03 pm

    I drop in from time to time to get Senor Kong’s outlook for the commodities complex.

    What say you, joven?

    • Forex Kong October 27, 2013 / 4:32 pm

      Short term we are on the brink of seeing USD make a considerable counter trend move higher….so Commods in general take an inverse dip.

      Then as USD sputters out we get our “final bottom” ( could even be a double bottom on $CRB ) for commod lift off to Venus.

      • Careydina October 27, 2013 / 10:27 pm

        Meaning risk on is coming soon?

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