In contrast to comments from Fed Pres Rosengren yesterday who wants an open ended QE program, Dallas Fed Pres Fisher is giving a different opinion this morning in an interview. He said that we already have huge amounts of reserves in the banking system and that the Fed is pushing on a string and is overburdening the central bank. “Monetary ritalin” is being prescribed to the system he said and it should be tax, fiscal and regulatory policy that incentivizes the private sector from here and not more Fed easing. Fisher is a non voting member as well as Rosengren. As most of the voting members on the FOMC are uber doves though, we can assume the argument of more easing will likely carry the day on Sept 13th. I commend Fisher however in standing out with the few at the Fed who are acknowledging the major limits of Fed policy at this point where the old rules no longer apply.
In Europe, June German exports and imports fell more than expected and IP fell a touch more than estimated. French business sentiment fell to the lowest since Aug ’09 in July. On the ECB and its defense of the euro, the quote of the day comes from a German govt official who said “all speculators who think that they can speculate against the euro: My dear friends, be careful, there’s somebody in the background who may join the game and his pockets are deeper than your pockets.” The fallacy in the quote though is the more euros are printed, the less value it retains. Lastly in the US, the MBA said purchase apps fell for a 4th straight week to a 22 week low and refi’s were down by 1.9%.
II: Bulls 43.6 v 39.4 Bears 25.5 v 27.7