Tick Tock... Waiting on the FOMC to Send the World into the Abyss

We all know what's going on here.

The markets are in virtual limbo, as the world awaits tomorrow's action by the Federal Reserve, due out with an FOMC policy decision (rates won't change) and an announcement that they will begin tapering their bond purchases.

That they'll make an announcement is known. Whether they decide to cut back on Treasuries or MBS is still an open question, though the smart money is on $10-15 billion less in Treasuries, beginning no later than December (possibly October or November).

The mortgage-backed portion of the portfolio will probably not be changed, as the Fed is the first and last buyer of MBS, the market having collapsed in 2008 when Fannie and Freddie went belly-up and the rest of the nasty stuff of the great collapse happened.

Until then, volume has been dead, though there's still plenty of speculation to the upside, in the clustered thinking that any Fed move has already been priced in (ha, ha, ha). How one prices in liquidity compression with stocks at all-time highs and at nosebleed valuations is a matter for market historians to ponder. While we certainly live in interesting times, they are also warped by the interventionist policies of central banks, who are losing their grip on the global economy, their long-standing franchise of greed over the whole of humanity.

The taper will occur, but the next best question is who will succeed Ben Bernanke on the sinking ship that is the global banking cartel. Since Larry Summers pulled his name from consideration to the top money-man post in the world and sharp-tongued politicians have recently decried the relative value of QE and zero-bound interest rates, a sacrificial lamb must be chosen by President Obama, and that choice is likely to be Janet Yellen, sure to be confirmed by the Senate because she is as clueless about economic policy as all of her predecessors and will be unlikely to make independent decisions, since she has never done so heretofore.

We anxiously await the Fed's announcement that the economy is trudging valiantly toward self-sustainability and that monetary stimulus by the Federal Reserve can thus be gradually wound down.

The time is upon us. Our breath may be baited, though the collective thirst has not been sated.

Dow 15,529.73, +34.95 (0.23%)
Nasdaq 3,745.70, +27.85 (0.75%)
S&P 500 1,704.76, +7.16 (0.42%)
10-Yr Bond 2.85%, -0.02
NYSE Volume 2,971,334,750
Nasdaq Volume 1,480,300,875
Combined NYSE & NASDAQ Advance - Decline: 4406-2182 (2:1)
Combined NYSE & NASDAQ New highs - New lows: 286-50
WTI crude oil: 105.42, -1.17
Gold: 1,309.40, -8.40
Silver: 21.78, -0.225