“The (potential) hawk is dead, long live the doves,” appears the chorus of approving ‘traders’ who have just bid the S&P 500 futures up over 1% to a new all-time high. The USD is getting monkey-hammered, Gold futures jumped $20 and Silver futures are up 3.5% (from the Friday PM fix) but are fading back close to the Friday trading close. Treasury futures open up over 1 point (implying 30Y -4bps, 10Y -8bps, 5Y -11bps) – jubilant at the money-printing to come – oh and WTI crude is -1.3% at $107.
And just like that, the Summers of the democrats’ discontent is gone (who for some reason saw Larry as the more hawkish of the two Fed candidates, when in reality it would have been Summers that would unleash Bernanke’s money choppers), as are all those unbooked profits by Paddy Power betters who saw Summers as a 85% odds on favorite to become the next Fed chair, and are now left with nothing.
Full Summers letter:
Dear Mr. President,
I am writing to withdraw my name for consideration to be Chairman of the Federal Reserve.
It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery built on policies to promote employment and strengthen the middle class.
This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.
I look forward to continuing to support your efforts to strengthen our national economy by creating a broad based prosperity and to reform our financial system so that no President ever again faces what you and your economic team faced upon taking office in 2009.
And the actual letter in its original, Harvard letterhead regalia:
More Official Reactions To Summers’ Stunner
Bill Gross, who is understandably delighted by the Summers resignation for the conventional reason that it means more QEasing is on deck, was prompt to put his thoughts to twitter, and conclude that not only is Larry-Off very Risk-On but it would benefit the belly of the curve, and lead to further 5s30s steepening as the 5 is bought.
The dollar had gained support late last week on news reports that Summers was set to be appointed at the end of this week and has weakened sharply on the news with EUR/USD moving above the 1.3350 level.
more at :
“As the US data continued to improve, Mr Summers would be considered to be much more likely to remove the stimulus quicker.
“The fact that he has pulled out would suggest we are less likely to have a quick exit from monetary policy stimulus in the US.”
More at :
Fair Value up 192.
Gold up 25.