What Does The Fed Know That We Don't?

September 21, 2011
	The briefing can be found in The Briefing Room.  It was actually updated on Sunday.  Time totally took advantage of me since then, causing this late notice. Late last week the Fed made an unprecedented move to provide dollar liquidity to the European Central Banks.  They need to do this because the regular market won't.  If the market won't, why should our Fed?  Hmmm, they must know something they aren't telling us and I have a feeling it isn't good. My favorite analyst, John Mauldin, wrote "What in the wide, wld world of monetary policy is the Fed doing, giving essentially unlimited funds to European banks? What are they seeing that we do not?"  He goes on to say:  "The only reason for this move must certainly be that theiy are acting to prevent what they fear will be another Lehman-type crisis. Otherwise it makes no sense. They can give us any pretty words they want, but this was not something calculated to make the US voter happy. To do this, you have to be convinced that “something evil this way comes.” And to recognize the costs of not doing anything, and try to head them off.  My guess is that the European Central Bank made a presentation to the other central bankers of the realities on the ground in Europe, and the picture was plug ugly." I don't know about you, but this doesn't paint a good picture for me.  The article points out that French Banks are leveraged 4 times the entire Country's GDP!  We saw what too much leverage did for us in the last credit crisis.  Europe has that same thing going on as we speak. Its funny, I've heard at least a million times how day traders are to blame for the volatility in today's market.  The people who have that opinion must not be aware of Greece, Portugal, Spain, etc, etc. The update,  found here, was short and to the point this week.  With great hindsight (since this message is coming out so late) I can tell you Don was right on the money again.  He mentioned how the market was up against a ceiling and would probably take a bounce lower before making its next move.  Monday saw the market give up over 2% before it started to climb back again. We do these briefings so that you, our faithful clients, will feel at ease with your investments even when the market isn't playing nice. The special two day Fed meeting concludes today.  I have a feeling we are going to see news of more easing.  What is going on behind the scenes may be a bit scarier than they are letting on.  If they announce a new round of easing the market should make a big pop upward.  If not, then look out below. Whichever it is, you can be assured we are on it! Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences View Email In Browser