Thrill-Ride Thursday – Fed Disappoints, Up to Consumers Now

We got the extension of Operation Twist we expected but now the Fed has changed to targeting unemployment and says they will begin taking away the punch bowl when unemployment hits 6.5%.  Once again the Fed's warning to US Businesses couldn't be any clearer – "If you want to continue to get Free Money – don't hire people!"  You don't have to tell our "job creators" twice not to hire people.  They haven't actually so much been hiring people anyway as our improvements in unemployment have more to do with people simply giving up on the work-force than actually finding jobs. 

That was certainly not the kind of news that was going to punch us up over our 5% levels so it's no surprise we had a little pullback yesterday.  That was also useful as we had $21Bn worth of 10-year notes to sell yesterday (went off at about 1.7%) and another $13Bn of 30-year notes to sell this afternoon at 1pm so a little bit of market fear is just the thing to get the bond buyers to the table – as "coincidentally" seems to happen every month.  

IN PROGRESS