Fed Easy Credit Becomes Inside Debate Focusing on Escape - Bloomberg: " . . . . Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co.; Jim Rogers, chairman of Rogers Holdings; Wells Capital Management Inc. and Goldman Sachs Group Inc. all have voiced concern about long-term bonds. The Jan. 3 release of the minutes from the FOMC’s Dec. 11-12 meeting illustrates investors’ sensitivity, Cohen said. Central bankers discussed possibly curtailing or halting their asset purchases this year. That surprised analysts and traders, sending the Standard & Poor’s 500 Index down 0.2 percent and pushing up yields on the benchmark 10-year Treasury note0.07 percentage point that day. James Bullard, president of the Federal Reserve Bank of St. Louis, says the “communication challenge” the central bank faces with the end of QE3 is comparable to all periods of easing. . . . Even though Bernanke said Dec. 12 that the transition to economic thresholds “doesn’t change our mid-2015 expectation,” money-market-derivatives traders since have accelerated their time frame for policy tightening. Forward markets for overnight index swaps, whose rates show what traders expect the federal-funds effective rate will average over the life of the contract, signal a quarter percentage-point advance around February or March of 2015, according to data compiled by Bloomberg as of Feb. 5. In December, these traders were pricing in a rate increase about June 2015. “There is no doubt that when the Fed pulls back you will see a big shoot upward in Treasury yields,” said Karl Haeling, head of strategic-debt distribution in New York at Landesbank Baden-Wuerttemberg, one of Germany’s largest banks. “There are a lot of people who think the only reason rates are here is because the Fed put them here. Nobody wants to be the last man standing.”
The 5 biggest investor mistakes of 2013 - Mark Hulbert - MarketWatch: " . . . . Mistake #4: Paying too much attention to politics. The panelists were united that good-quality companies are able to adapt to whatever the political environment may be in Washington. Finding and investing in them should be our focus, rather than trying to predict the outcome of our inscrutable political process. As one panelist put it: “Don’t let a politician tell you what to do in your portfolio.” Mistake #5: Being a dumb trader. . . ."
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