Passing the Torch

No news out again
today.  Today the baton will pass from Ben to Jan (so to speak) after
the close of this, Ben Bernanke’s last Fed meeting.  Many expect that the
FOMC will taper their Bond purchases for the second month in a row, committing
to buying only $65,000,000,000 per month of the debt instruments.  Some have brought
up the fact that the decrease in purchasing participation is really only
having an effect in name only.  Because new mortgage activity has slimmed
dramatically as interest rates have risen, a $65B purchase is actually a larger
percentage of market share than it was six months ago when the Fed was
gobbling up $85B per month.  While understand the math, I believe
that it’s the perception of the participation, not the percentage of
participation that will influence the investors’ image of the
economic landscape.  And with no Q&A after the conclusion of
today’s session, it will indeed be up to the imagination of traders to
determine the motivation any action (or lack thereof) until the
meeting minutes are released three weeks from now (it takes a while to make it
decipherable for us non-PhDs).