A sobering somber session – for everyone; given the seemingly senseless as well as ‘unresolved’ murderous attack in San Bernardino California, with heavy suspect search efforts going on in nearby Redlands as we go to press. Details will unfold as the evening evolves, and so far bears characteristics of terrorism (organized, plan, multiple perpetrators); although one report suggests one dead attacker (the other a woman) appeared Caucasian; but that’s not confirmed. A 3rd suspect (or more) are being sought by authorities in this fluid situation.
As of now the FBI is bringing in more resources, as explosives were thrown in the streets, believed found in the building first attacked, and may be elsewhere as the investigation unfolds. The FBI has ‘adjusted’ their approach to consider the possibility of ‘terrorism’, but they’re not willing to say it goes that way as yet. What’s likely is that this was NOT an Islamist attack, but law enforcement at the moment believes a disgruntled guest at the ‘County’ party left and returned with the woman and committed the atrocity. Workplace or similar violence taken to a horrible extreme? Too soon to tell; but the suspicions point that way. Ironically if so it’s a sad reflection on society if local idiots behave like this who aren’t even radical terrorists. Hard to feel relief about that, or anything associated with this.
Tuesday saw a barrage of negative economic data-points outlined in yesterday’s report, which the market ignored. It sure did that; we shorted it and have a solid downside gain, which is retained overnight. Now you may get some rebound if we awake with relief that this was not a terror attack; but remember that the majority of all of Wednesday’s reversal was largely ongoing before news of the attack. (As I’m typing this, the FBI and local SWAT are raiding a townhouse in Redlands.)
Bottom-line: matters were reversed from up-to-down but accelerated more on news from California. The Beige Book was sort of firm; while Yellen rationalized the lack of inflation based on strength in the Dollar and weakness in Oil. That’s the heart of how she defended the upcoming rate hike prospects; presuming (a little premature to do so incidentally) that the Dollar will soften and Oil firm; thus restoring something like a 2% inflation rate (yes the Fed, not citizens, generally prefer that inflation be reignited, for reasons we’ve often explored).
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