10yr UST
S&P500
Dow
Yes, the fog has descended. With yields rising the Fed's idea to propel stocks upward is failing miserably, even though we are at two days of the $600billion buy up of US Treasuries by the Federal Reserve. The plan is going haywire
from Reuters:
A rise in 10-year Treasury yields to a three-month high pushed the dollar, with the Wall Street Journal reporting that a group of Republican-leaning economists was launching a campaign calling for the Federal Reserve to drop its plan to buy $600 billion of Treasuries.
So we have some internal disputes occurring namely the Republicans who correctly are concerned with long term ramification of printing excess liquidity into the system, debasing the US Dollar and leading the US economy further into inflation.
From Market Watch
NEW YORK (MarketWatch) -- U.S. stocks struggled to hold their gains late Monday as Treasury prices fell sharply, denting cheer that came with a jump in retail sales and after Caterpillar Inc. announced a sizable acquisition.
"Treasury's are getting splattered and 10-year yields are at three-month highs; if rates are going up, it's not a good thing for equities. This is the Fed's worst nightmare," said Peter Boockvar, equity strategist at Miller Tabak.
The grinner's in all this are the foreign debt holders, whose currencies have been over bidded on a weak USD, a somewhat sigh of relief. But major stock sell off's (globally) which could speed up towards the end of 2010 may lead to a further monetization from the Fed, still this should be offset with confusion, turmoil and internal disputes at the direction of the US ecomomy. Europe and China will also add to the tensions (economically), that may further lead to economic/trade conflict/s.The fog of war falling over the markets may only get worst as the global economy reaches closer to it's tipping point.
Market volatility will be extreme towards the end of 2010 and into 2011
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