Business

Is 'the committee to save the world' about to 'unsave the world'? Not according to The Fed who see their balance sheet unwind as boring a "watching paint dry."

Of course, aside from the fact that The Fed has been unable to forecast its way out of a paper bag for decades, more than a few market participants believe otherwise, including BofA who recently warned..."the paint may be drying but the wall is about to crumble."

With the Fed set to unveil its first balance sheet reduction in modern history - an event that is largely priced in - what traders are far more interested in, is what will happen to the Fed's "dots", where consensus anticipates no move for the 2017 dot, while the 2018 and 2019 dots could shift lower as the FOMC language turns slightly more dovish.

How could this dot "migration" take place?

First, as Adnan Chian observes, at least 4 Fed members need to move their 2017 dots lower to shift the median from 1 more hike in 2017 to no more hikes, i.e. December is "dead."

Authored by Simon Black via SovereignMan.com,

Today’s the day.

After months of preparing financial markets for this news, the Federal Reserve is widely expected to announce that it will finally begin shrinking its $4.5 trillion balance sheet.

I know, that probably sound reeeeally boring. A bunch of central bankers talking about their balance sheet.

But it’s phenomenally important. And I’ll explain why-

Reviewing first day motions from a company's chapter 11 docket, and more specifically the CEO's declaration, can be a great way to learn exactly what happened in the days/weeks leading up to a bankruptcy filing.  The company spends millions of dollars every month on expensive lawyers (Kirkland & Ellis in the case of Toys "R" Us), investment bankers (Lazard), turnaround advisors (Alvarez & Marsal), claims administrators, etc., who all spend many sleepless nights in the days leading up to a filing trying to make sure the first day motions are as informative as possible.

If once is happenstance, twice is coincidence, and three times is a full-blown collapse in the financial system, then Russia may be getting close.