Halloween

By Colin Twiggs
November 1, 2010 4:30 a.m. ET (7:30 p.m. AEDT)

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According to wikipedia the word Halloween (or Hallowe'en) is a Scottish variant of All Hallows Evening: the night before All Hallows Day. The celebration traces its origins to the Celtic festival of Samhain which celebrates the end of the "lighter half" of the year and beginning of the "darker half". The ancient Celts believed that the border between this world and the Otherworld became thin on Samhain, allowing spirits (both good and harmful) to pass through.

I hope that the FOMC commitee at the Federal Reserve remember this at their meeting on Monday/Tuesday. Any wrong step could bedevil the markets. The Fed chairman announced his intention to pursue quantitative easing, fixing market expectations. Failure to deliver would whip up a market storm. Similarly, "shock and awe" measures in excess of market expectations would induce panic and a flight to safety. The Fed is walking a tightrope of its own making. I question the wisdom of holding a public debate on such a sensitive issue.

Mid-term elections on Tuesday also add to the mix. Surveys indicate a large swing to the GOP/Tea Party, which is likely to restrict any further fiscal stimulus. Leaving Fed monetary policy as the only game in town. And one with a poor track record at that.

We also have the next throw of the dice in the global currency dispute, at the November 11-12 G-20 summit.

The normal Monday newsletter will be withheld until Wednesday, when we have more clarity on the elections and the FOMC meeting. Hopefully we will not witness any ghouls leaping out of the closets. Happy Halloween.

From ghoulies and ghosties
And long-leggedy beasties
And things that go bump in the night,
Good Lord, deliver us!

~ Scottish saying