I’m going to be gone Monday through Wednesday of next week on business, and my ability to blog will likely be curtailed. I would simply like to offer two observations. The first is on the FOMC. Given the balance of all of the data, I believe that the FOMC will loosen by 25 basis points on Tuesday. They will issue the standard “two-handed economist” language about troubles from inflation and financial/economic weakness, indicating that the FOMC is vigilant, and that nothing more is coming given present data, because the FOMC is in control.
The markets will be disappointed by 25 basis points, and will get excited by 50. Language of the statement will matter some, but I can’t imagine that it will be that amazingly different from before.
One other note: I will write more about National Atlantic at a later date, but for now I am just holding my head in my hands and moaning. I know there are forced sellers in the name, but to be at 40% of tangible book on a short-tailed name is notable. It indicates that claim reserves at the end of the second quarter would be 50% light, to justify current valuations.
I’m not suggesting that anyone buy the name; for me, if it stays at these levels, it will be my largest personal loss. I teach my children about investing through my losses. If things don’t change, this will be lesson one.
Full disclosure: long NAHC