Market Briefing For Tuesday, October 18

'Animal spirits' are absent in the United States economy these days; and that's a (twice repeated) comment by Fed Vice Chairman Stanley Fischer today at the New York Economic Club luncheon.
 

The remark is absolutely key to counterproductive monetary and fiscal policies of Government in recent times, so much so that this revelation of the 'Fed getting it' bears pondering. It also contradicts the prior Fed views; and is part of why we believed he was brought in to commence both the tapering and exodus from over-extended policies. (As well as to sober the Fed views of what can be done in this new low-wage US recovery era).
 

I was quite pleased at the degree of candor in his speech, which, I took note, was covered live by only 1 of the 3 financial networks. Perhaps two of them felt that a serious discussion of 'what's going on' didn't merit a detailed discussed. Yes, one of the others had esteemed managers for interviews; but they didn't discuss Fischer or his remarks so much as everything already heard. These guys were mostly concerned, as am I; but I just find it astounding that the speech was not appreciated for the seminal proclamation that I think one could conclude as a 'takeaway'. 

It's also a political hot-potato to bring-up 'animal spirits'; given both party views differ widely on nanny-state economic cases, as well as whether or not 'trade deals' will be modified or unwound to help push jobs here. I think they will be modified, regardless who wins (more so with Trump; not because he knows much, but his delegates would likely behave in a way more for the interests of the United States). Even Hillary would it seems be more inclined to move to the center on this issue. However I am just optimistic that Chris Wallace will keep the debate 'on issues' in Wednesday's final bout of what (if this were the 1950's) we'd likely call: 'The Gillette Cavalcade of Sports' (boxing).

The Vice Chairman seems either depressed or nearly despondent on what can be done 'shy of an emergency'. Although I thought that for a long time, it's very interesting to hear the Fed Vice Chair today so while I totally concur, I also note he had to say there's no 'fiscal emergency,' as no official would say that. So I think as it is he went pretty far into it.

While this was going on, very few seemed to notice an Oil story about their Oil Minister essentially saying Iran is skirting the presumed OPEC quota in stating OPEC is miscalculating forward production allowances for Iran. Iraq and Venezuela issues similar statements. Oil wasn't hit a lot; but it's part of the backdrop for the 'potential' deal unraveling again.

We hold Dec. S&P short from 2067.