25 Jan FOMC and the American Day of Shame

profit taking ahead of FOMC across all instruments. Most notable is the USDJPY move, with JPY weakening, after Noda announces to raise sales tax to offset deficit. Though it has to be passed by parliament and instituted year after.
Seems like Japan is now feeling the pressure of Deficit crisis. Would the rating agencies wait for Noda ?
Japan also lower economic forecast. Higher taxes in slower growth.

Would Benny annonces QE3 to give Japan a boost ?

State of the Union
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instead of going after those Banksters who fleeced taxpayers monies, Obama announced war on millionaires. This made Jim Rogers who quit his US Citizenship years ago seem so smart.
30% tax is big deal. Imagine a hard-working executive who has to contribute $3 for every $10 he earns to fund some drunkards on the streets, it is hard to stomach.
So Obama has made this a Rich-Poor election, with Romney right at the opposite.
While congressman having to pay 30% tax, however they have other grey incomes. While academic staff like me, slogs through schedules, have to lose 30%. This is simply not acceptable.

With World Economic Forum at Davos, a growing audience is really pissed by Obama and wants a Atlas shrug moment.


Obama wants to setup a sanction China Trade Commission, while China Chairman in waiting, XI Jin Peng wold be travelling to US in FEB. XI has more to answer than to request. Like the rampant accounting fraud in China companies listed on Nasdaq.
Now it seems like there is some form of anti-dumping tax on anything mass manufactured from China, like rubber tyres, solar components, etc.


Update from Davos
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UK is really in the spotlight, with its chances of a Western offshore center for RMB growing. Next institutions would remit monies into London in GBP, and then convert to RMB. In a way GBP is "pegged" to RMB. This "peg" would also make RMB more convertible.
So one of the blackswan trade would be the rally of GBP back to its glorious days.
While Germany and EU would provide for a cheaper Euro to make the Southern Europe more competitive.
Of course, if you want to assault GBP, you need the nod from Uncle George, the master of Currency War.

I would be meeting some Free-Masonites and Illuminati to plot the next move.

Update from Davos update 1 am ET 25 Jan 2012
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We are now clustered in this cosy suites of ours in this swanky hotel in Davos, and ready to trigger the trade at 1 am ET. Our pals have just returned from their Chinese New Year holiday, we are ready to make this first trading day of the Black Dragon year a bang. 5 more minutes.

Now all my Europeans colleagues are grinning smugly at us, the Americans, with the thought that finally all Americans and Europeans academics and executives are now on par with taxes.

Side chat
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sitting in a cafe, one guy was trying to sell insurance linked investment product to a couple. He has to talk about conspiracy theories, having attended a funeral to persuade them to buy.

Update US 10 AM ET
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current pullback seen as wave 4, for the eventual wave 5 after Bernanke talk today.
Obama state of union:
Hundreds years ago, Afroamerican is liberated and given equal rights as their white masters. Yesterday, January 24 2012, a descendant of the Afroamerican created a rift between the whites and the blacks, instead of uniting the nation.
It would be remembered in American history as the day of shame.
And the shadow of the BEAST is getting clearer towards the fateful day of the Winter Equinox.

SPX should be heading towards 1300, and then again to test 1320 and onwards into 1330 to 1340, before a larger pullback.
While Euro would hit below 1.2900 and then off to 1.3150 to 1.3200.
Gold may drop to 1620, then onwards into 1700, 1900 and off to 2500 eventually.

Essential wait for dips, and go aggressive on longs. This shold carry into early Feb 3.