Has Anyone Seen My Operation Twist?
I was just looking around to see if anyone had noticed any substantive impact of operation twist by the Federal Reserve (see the November Fed POMO Schedule). Initially we saw mortgage rates drop to record lows however beyond that I’m not sure what impact (if any) this has had on financial markets. On the other hand I do have some anecdotal evidence that auto sales at the very end of October were very strong.
Operation Twist: Sell Short Duration, Buy Long(er) Duration
On the one hand Operation Twist has to have had at least some impact on moving long term lending rates lower. On the other hand it has not resulted in any sort of substantive change in short term rates (as we had previously hoped Operation Twist might) which would boost short term fixed income earnings. Unfortunately that hasn’t materialized as there appears to be know amount of pure monetary pressure (short of outright money printing) capable of lifting short term rates.
Global Pressure Mounts in Europe
Hats off to our friends at the ECB for not only managing to over-throw the Greek government, but also throwing Italy’s Berlusconi government under the bus as well. Congratulations! Anarchy reigns! Woo hoo! In all seriousness though folks, governments that think they’re sovereign have found out the hard way that they are not sovereign but in fact owned by the TBTF banks and their minions at the Fed and ECB. I suppose it’s only a matter of time before the German/French run ECB over-throws the governments of Portugal and Spain as well… but hey, we had a nice run at the German’s expense, right?
Keep Operation Twist-ing in the Wind
I suppose it’s hard not to be cynical these days. We all sit here and do our jobs (those of us who still have them anyway), and we pay our bills and we pay our taxes. Meanwhile a bunch of jerks who think they deserve it all sit in ivory towers and literally divide up for themselves nearly all of the value of the collective labor of 7 billion people. Am I the only person that thinks there is something substantively wrong with that?