Date: September 4, 2012

Like Watching Paint Dry

Unlike the summers of 2011, 2010, 2009, 2008, 2007 and 2006, the summer of 2012 has been very, very quiet.  Volatility is at an historically low level.  Volatility contraction leads to expansion and vice-versa.  At some point, we are going to see a spike in volatility and that will shock the system. 

Later this week, Ben Bernanke will make his annual speech from the Fed’s retreat in Jackson Hole WY on Friday at 10:00am.  While everyone will be on the edge of their seats for clues about the Fed’s next money printing program, it certainly does not seem like Ben will unveil the plan this week.  But I continue to believe it is coming!

Bernanke’s ECB counterpart, Mario Draghi, was scheduled to speak on Saturday morning but just canceled, a smart move in my opinion since Europe still has so many problems.  Circle September 12 on your calendar for the date that the German courts are supposed to rule on how and when bailout is allowed to be used.


Paul Schatz, President, Heritage Capital