The Fed, Behind The Magic 8 Ball?

Summary

Discussion of the potential effects on equity, bond, commodity, capital and asset markets regarding:

FOMC announcement on Dec 16th, 2015; the Fed's 4.7T portfolio duration mismatch.

More QE?; potential negative Q1 GDP; the commodities collapse; a Santa Rally?

New Year Asset Manager Portfolio Realignment; the "dollar" squeeze.

The Fed has over 300 PhDs on research staff, the best quantitative and qualitative analysis toolsets and no lack of funding, yet they have NEVER predicted a recession in advance. This fact proves that economic prognostication is an inexact art and science.

In brief, this is the fourth in a series of thematically related missives, which will attempt to identify the macroeconomic forces with potential to adversely affect capital, commodity, equity, bond and asset markets.

Given the overall success ratio of Fed actions, especially since Greenspan took over, one might believe that voodoo spells and incantations could provide better results than attempting to control employment levels, inflation and the overall economy with a statistically unreliable, useless and volumeless rate lever such as FFR (Federal Funds Rate).

In any event, the Nattering One has questions, which beg to be answered, as many others do. Left adrift in a Sargasso sea of questions regarding yesterday's much-trumpeted FOMC policy announcement, we decided to consult an old market oracle (not of Omaha) whose track record has been just as good, if not better than the Fed's. For your information, entertainment and amusement, the questions, answers and our interjections are chronicled below.

Question: "What about the Fed Statement? From what I can tell, most people expect a dovish statement and that should drive markets higher and the dollar lower. Could be beneficial to commodities."

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