11:05PM after several long busy days is probably not the best time to start a blog.  My good fortune demands that I spend a minute just letting you know what a lucky guy I am.

After takin' Jack to his school, I headed to a meeting.  I can't tell you much about the meeting because it is a project in its infancy.  It has nothing to do with anything I have done.  It has nothing to do with the studio we are contemplating.

This project is being pulled together by a couple of guys and a cast of very talented people who want to build something desperately needed and much bigger than them.  I was probably introduced to them as I might have had a couple of bucks to help get their project off the ground.

After several meetings and getting to know the vision of the project, I am considering it an honor just to be participating in the formulative stages of the concept.  More importantly the talent pool they are drawing and the fiscal resources they have networked make me embarrassed about my initial observations during my first encounters.  They do not need me or a single dime from me.

You see, when you are fortunate to have exited a job and made a couple of dollars, you get approached from many, many opportunities to invest or help a multitude of entities.

You will here more from me and eventually many others as this project unfolds, but I was flattered today to participate in a strategic development meeting in which the end result of this message and brand, can and will serve a multitude of folk and long outlive the 5 guys sitting at the table today.

I am truly lucky.

As a result of sitting in that meeting for a few hours this morning, I did not get to hear what Uncle Ben had to say, but the market liked it.  Let see what details I could dig out tonight.

Buy On The Rumor . . .

There is an old adage in the market, "Buy on the rumor.  Sell on the news."  That is exactly what happened today.  

As I was getting ready to head into my meeting, the world was waiting for Uncle Ben Bernanke to share with us, the latest message from The Federal Reserve. 

Many believe the latest rally run up since November 25th (Yeah that was my Green Flag over there to the right.), was partially due to the expectations that the Fed would kick off QE (Quantitative Easing) Infinity today as Operation Twist was coming to an end this month.

Uncle Ben did not disappoint and announced a series of new treasury purchases for 2013 with a monthly average of 60-85 billion a month.  (Much higher than I quoted last night.)  The Fed did take a somewhat unusual approach by tying QE to numerical benchmarks it has very little control over.

QE will continue till unemployment approaches the Feds target of 6.5%.  That is an interesting decision as the last three years of unemployment extensions has impacted the structural unemployment upward of some estimates of 1.5-3%.  So instead of full employment of 5% as in 2007, full employment might be 6.5-8%.

Keep in mind the fed is referencing the U-3 unemployment figure not the U-6 figure which probably a truer reflection of the unemployment situation.  

U-3 does not measure those that have come off the unemployment rolls and are off the radar.  U-6 is estimated to be about 12-14% (some say as high as 17%, but that might have been campaign rhetoric.)

Now the Fed has had a 0 interest policy for three years and has dumped trillions in keeping the economy afloat and we still have almost 8% unemployment.  Political impass, bureaucratic draconian regulation, and poor policy confidence had lead business leaders to hold up on investing in their companies with capital expenditures and payroll increases. 

The Feds decisions will not change that. 

In my former world, it would be like the executives at PADI saying, we are going to lower our prices to $XX until Ford and GM sell 20 million units a month.  This is a peculiar move by Uncle Ben.

He also set an inflation target of 2.5%.  Ok I'll buy that.  The fed decisions do impact inflation.  Traditionally the Fed does gauge interest rate policy taking inflation into consideration.

Just like the adage says, "Sell on the news."  The marker did just that.  At 10:30 am PST the market was around 13,329, the high for the day.  Obviously it finished off 3 points.          

Price Performance

at 4:59PM EST 12/12/2012

DJIA:              13,245.45          -2.99

S&P 500:         1,428.48          +0.64

NASDAQ:        3,013.82          -8.48

This is all good news.  From the way market reacted, the size and Message delivered by the Fed was well anticipated and the market got what it was expecting.  Had the Fed not delivered QE Infinity, we could have easily seen a 6-8% correction today.  (That would have been around 1,000 points on the DOW and 125 on the S&P)

BUT (Behold the Underlying Truth), now we will return our attention to dumb and dumber (again I will let your political persuasion decide which is which), to see what magic they can work in DC to bring the Dow Down 1,000 points between now and the end of the year.  

Since 11/25/2012

I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.

BAGAKOAA=Boys And Girls And Kids Of All Ages

Salve Lucrum=Latin for Hurrah for Profit.

2012 Year Ending

Dow 13,073

S&P 500 1,358

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