Weekend of 9-16-11

1. There are over 20 exchange traded funds  and notes (ETFs and ETNs) tied to the volatility indexes (VIX and others) says the WSJ here.The big  DAILY stock index swings of August have now  become WEEKLY moves in September, so in some sense volatility must be decreasing right?

2. Operation Twist, a buzzword resurrected from the 1960’s refers to an interest rate policy where  central bank;s attempt to flatten the yield curve by raising (or keeping constant)  short-term interest rates while lowering long-term ones. Some of this may have already happened when mortgage rates hit low levels late this summer. Something else must be in the offing if the intent is to surprise markets (remember expectations..).  That is the point made well in a post from Zero Hedge (Here).

3. Also remember that late in August there was speculation that the Fed would make policy announcements after their September meeting.  The market got excited that it had been extended to two days!  As I say often in class, this is the kind of nonsense that moves prices these days (and keeps moving them at each repetition!). That announcement is this coming week. Quelle surprise?

4. I made some off the cuff remarks about the European Monetary Union and the Euro the past week. Here is a link to a document by several UBS economists that lay out the implications, methinks accurately.