Lost feelings return
So now maybe I'll learn
To stop this world of a lie
This time around
--The Fixx
Eye opening study by the NY Fed. Suggests that if you factor out market movements from the periods surrounding FOMC announcements since 1994, the SPX would be roughly half of today's level.
Oddly enough, I have been estimating 'fair value' of the SPX right around 600.
The dual money printing, moral hazard card at work.
position in SPX
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We show that since 1994, more than 80 percent of the equity premium on U.S. stocks has been earned over the twenty-four hours preceding scheduled Federal Open Market Committee announcements (which occur only eight times a year)—a phenomenon we call the pre-FOMC announcement “drift.”
~Simon Potter
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