The old wisdom used to be "when in doubt, stay out of the markets". Actual finance theory and empirical data suggests otherwise - when in doubt, stay in your asset allocation. Yesterday again proved this point. By not keeping to your targets or stops, you have no targets - and the only stop will be your wife. Stick with the plan.
Previously
on MoreLiver’s:
News
roundup – Between
The Hedges
The 6am Cut
London – alphaville
/ FT
Emerging
Markets Headlines – beyondbrics
/ FT
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
There was relative calm in the currency markets
during the Asian session following the volatile gyrations seen overnight
post-Bernanke. With most order books likely wiped clean by the price action, Asia kept currency pairs tight-ranged.
Market Preview: BoE minutes on tap – Saxo
Bank
European markets are expected to open firmer
Wednesday. Yesterday, Federal Reserve Chairman Ben Bernanke offered no hints of
further monetary easing in his testimony to Congress. Market participants await
the release of the BoE minutes due today.
Danske Daily – Danske
Bank (pdf)
Markets
quickly shook of the initial disappointment after Fed chairman Bernanke’s statement
before Congress and the US stock market recovered strongly supported by a couple
of well-received US corporate earnings…Focus today will be on minutes from the
5 July meeting of the Bank of England and UK jobless figures… Fed Chairman
Bernanke gives his semi-annual report to the US House…the Fed releases
its Beige Book survey
EURO CRISIS
Why Eurobonds Are Pointless – ZH
UBS: A more integrated Euro area
federation can (probably must) take place without collective responsibility for
national debts. What is needed is collective responsibility for some aspects of
fiscal policy to offset the damage of collective monetary policy. That is a
very different concept from the Eurobond.
More flight of capital out of the Eurozone – Sober
Look
Large euro deposits originating outside of the
Eurozone can come from the Fed Liquidity Facility (the Fed took in euros as
collateral for dollars it was lending out) or from other central banks trying
to defend the euro peg.
FED
FOMC's new tools – Sober Look
This got a
great deal of speculation going. What could be the "new tools"? Here
are some possibilities:
Bernanke’s Choice – The Daily
Capitalist
Bernanke delivered a bleak new assessment of
the U.S. economy to lawmakers on Tuesday but remained guarded about what, if
anything, the Fed would do about it.