Considerable distaste for both administration and Fed policy may have corroded our judgment in the exercise of US strategy making, recent weeks.
We expected an activist Fed and a statist administration to act as a governor on real sector activity - the Fed has sabotaged market-based capital allocation and the administration is simply hostile to free enterprise.
We predicted that consumer activity would wilt; we predicted that risk takers would shy, that job creation would disappoint. Based on this, we had predicted a contraction in the US term structure and advised trading desks to set trades with this in mind. Thus, we advised selling (S-L) the term structure early Jan; however, that had to be taken in, mid-Feb, at a modest loss.
We had expected that 1) the payroll tax hike and 2) publicity surrounding job cuts tagged to ObamaCare would hit the consumer with a wallop. Income has been going nowhere, even before taxes so we calculated the consumer was ripe for a fall; but instead, consumption grew a tad in January.
We had expected a guaranteed four more years of regulatory nightmare to discourage risk takers, and job creators. Instead, jobs creation did not nosedive; at least not higher paying jobs. And recent measures indicate manufacturers continue to invest in their future; in fact some are downright optimistic.
So we cannot claim ownership to a leg-up over the market crowd and will reconsider over the near term.
Robert Craven
We expected an activist Fed and a statist administration to act as a governor on real sector activity - the Fed has sabotaged market-based capital allocation and the administration is simply hostile to free enterprise.
We predicted that consumer activity would wilt; we predicted that risk takers would shy, that job creation would disappoint. Based on this, we had predicted a contraction in the US term structure and advised trading desks to set trades with this in mind. Thus, we advised selling (S-L) the term structure early Jan; however, that had to be taken in, mid-Feb, at a modest loss.
We had expected that 1) the payroll tax hike and 2) publicity surrounding job cuts tagged to ObamaCare would hit the consumer with a wallop. Income has been going nowhere, even before taxes so we calculated the consumer was ripe for a fall; but instead, consumption grew a tad in January.
We had expected a guaranteed four more years of regulatory nightmare to discourage risk takers, and job creators. Instead, jobs creation did not nosedive; at least not higher paying jobs. And recent measures indicate manufacturers continue to invest in their future; in fact some are downright optimistic.
So we cannot claim ownership to a leg-up over the market crowd and will reconsider over the near term.
Robert Craven
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