Usually good policy, but I never let that get in the way of things. After about 3.5 years in my current role, I am putting pen to paper, metaphorically speaking, to keep a record of what I see going on in markets day by day, longer-run trends, and repeating patterns.
I'm starting this blog after quite a good September, when markets finally awoke from their summer-long slumber. Fixed income rallied strongly, gold marched upwards, breaking $1300/oz, without breaking a sweat, while equity markets also rallied. This is a bit counterintuitive, as bonds and gold rallying normally indicate fear, which should be bad for stocks. However, something different is going on here - it's the slowing US economy. How does that make stocks rally? Simple - there's an election coming up, and the government is getting ready to dumpore cash into the economy, by buying up bonds. This should filter through to the "real economy", souring economic activity.....but also possibly inflation. The combination of higher inflation and lots of printing currency is pushing people to gold, while the value of the USD has been in a long decline. This QE II policy has been well telegraphed, everyone is waiting for it to begin. The more bad economic news we get, theore certain people are that it will happen, so they bid up bonds, stocks and gold even higher.
So that's the big picture from over here. Lots going on with the euro and the yen and Emerging Markets too, more on that later...
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