The focus continues to be on the long awaited Fed tapering and the comments from various Fed governor's about it. One says its due to start soon, another sees it being a longer process than originally planned. We say, just get on with it! The money is in the system. The banks are using it as you would expect them to use it: to help their bottom line.

Companies continue to report moderately strong earnings and unemployment is inching lower.
We are done waiting, just do it. Tapering can take all forms. Lowering the repurchasing to 75 billion a month seems most likely. The fear of an interest rate rise will happen no matter what the Fed does and the pain can be muted or it can put the brakes on this slowly growing recovery.
We think that the expectation of an interest rate rise is more dangerous than it actually becoming reality.

In the real world, corporations have already taken advantage of the extended low interest rate environment and have plenty of money on hand to weather such a scenario.

Individuals, have already taken advantage of that environment already. Housing is the prime example of the benefits of lower interest rates and the private sector has reduced debt significantly so a slightly higher interest rate won't be a significantly adverse condition.
So, lets end this and let the economy grow on its own.
We aren't afraid.

This week we are going to get a better handle on the rising interest rate environment when the various price indexes come out. We do think there will be a sharp increase in both the PPI and CPI. Normally this would be a undesirable situation since wages may not be rising in proportion but we do think that some inflation is healthy and won't be panicked if these numbers come in high.

The low volumes will continue and we will be bouncing around for the next few weeks and direction will soon readjust to the positive side and we still believe that we will end the year on a fairly strong note.