Post - Larry Summers exit from consideration as Fed Chair - Asian stocks / European stocks / US stock futures elevate , US treasuries and German bunds prices up as taper concerns lessen , USD weakens while pound , yen and euro strengthen , EM to be boosted ...... favored prospect Yellen seen as even more dovish than Bernanke ....Oil , gold and silver fall ?

http://www.businessinsider.com/heres-the-petty-reason-obama-might-not-appoint-janet-yellen-to-the-fed-2013-9

With Larry Summers dropping out of the Fed race, it now appears clear that Janet Yellen is the frontrunner to succeed Ben Bernanke.

According to WSJ, the White House is not inclined to start fresh with new names, and since Yellen was the #2, Summers' departure makes her the #1. But it's not a done deal until it's over.

POLITICO's Ben White — who deserves credit for identifying Summers as the favorite before just about any other reporter — says in today's Morning Money that while Yellen is probably the frontrunner, one can't discount the possibility of someone like Roger Ferguson, also a former Fed vice-chair, and the CEO of TIAA-Creff.

White cites one "well-connected" source who offers the following argument for Obama to pick Ferguson:

“He handled the Fed’s response to 9-11 adroitly and is a calm and analytical policy wonk. He knows the President and Valerie Jarrett well, but also gets along fine with Republicans on the Hill. And if he is the pick the President could let it be known that he won’t reward Elizabeth Warren for sabotaging the Summers pick by giving the appointment to Warren’s pal Yellen.”

This idea that The White House might not appoint Yellen over frustration with how the Summers nomination went down has been reported elsewhere.

Immediately after Summers withdrew, David Wessel at WSJ reported:

One leading candidate is Janet Yellen, the Fed's current vice chairwoman, who has garnered substantial support among Democrats in Congress and among economists. But the public lobbying on her behalf appears to have annoyed the president, say administration insiders, and may lead him to look elsewhere.

Bottom line: Yellen is now the favorite according to reports. But if she doesn't get it, it may be because the White House is angry at the way her supporters torpedoed his #1 pick.

Summers exits , Geithner say "  No Thanks " .... And is Kohn also signaling to the President  don't look my way either ?


http://www.zerohedge.com/news/2013-09-16/time-cross-donald-kohn-out-too

Time To Cross Donald Kohn Out Too

Submitted by Tyler Durden on 09/16/2013 17:34 -0400

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First, Summers steps away; Second, Geithner politely declines; and now - just as his odds of becoming the next Fed Head begin to rise, Donald Kohn drops the following headline bomb-shells at a Brookings' event this morning

• KOHN: BAIL-IN NEEDED TO PROTECT FINANCIAL SYSTEM FROM TOO BIG TO FAIL FIRMS
• KOHN: VERY EASY MONETARY POLICY CAN CREATE DANGEROUS RISKS

That should be enough to effectively remove himself from the running... It seems we are back to the lowest common denominator Fed-head - so much for American exceptionalism again.

More headlines (via Reuters):

• KOHN: GREATER FINANCIAL TRANSPARENCY NEEDED TO ENSURE STABILITY
• KOHN COMMENTS ON PRINCIPLES OF PROTECTING FINANCIAL SYSTEMS IN GENERAL
• KOHN: US IN EXPERIMENTAL STAGE OF REGULATING FINANCIAL RISKS
• KOHN: US REVIEWING INDICATORS OF FINANCIAL RISKS FOR POTENTIAL DEEPER DIVES
• KOHN: DON'T EXPECT TOO MUCH FROM FINANCIAL SYSTEM OVERSIGHT
• KOHN: FINANCIAL OVERSIGHT WON'T PREVENT MAJOR CRISES, RATHER BUILD SYSTEM RESILIENCE

Ian Talley at the Wall Street Journal notes some other - 'less-than-uber-dovish'-comments (which make far too much sense for a Fed Head) from Kohn's talk at the Brookings Institute today:

“Very easy monetary policy often builds imbalances that may become so large that can’t be countered by regulation,”

...

“Problems can arise when one policy [monetary or financial regulation] is leaning so hard in one direction, the other can’t compensate, can’t achieve its objectives. And in these extreme kinds of circumstances, each policy may need to pay more attention to the objectives of the other’s.”

...

“We can see in the United Kingdom, in my role on the financial policy committee in the U.K., how useful it is to have an autonomous group, an autonomous voice, that can say to the monetary authorities, or the governmental authorities, you’re pushing so far in this direction, we’ve used our regulatory tools, but we think you are creating instabilities.”

So Kohn is definitely NOT a deregulator as Summers was perceived (rightly) to be - but his skeptical view of the Fed's bombast is hardly gonna to please the powers that be

The Firm Where Don Kohn Works Says Obama Has No Choice But To Nominate Janet Yellen

SAM RO 47 MINUTES AGO 193 

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REUTERS/Jason Reed

Donald Kohn, then Vice Chairman of the Board of Governors of the Federal Reserve System, speaks at the Symposium on Interest Rate Risk Management in Arlington January 29, 2010.

The big news of the day is Larry Summers' withdrawal from the race to become the next Chairman of the Federal Reserve.

With the former Treasury Secretary out, economists see Fed Vice Chair Janet Yellen as a shoe-in.

Of course, some continue to point to others who still have a strong chance of being nominated.

One name that advanced after Summers pulled his name was former Vice Chair Don Kohn.

But first, here's some commentary from Potomac Research Group's Greg Valliere, one of the more connected political analysts in D.C.:

FIRST, A WORD ON SUMMERS:   We never understood why Barack Obama wanted still another fight this fall; the budget crisis will be more than enough. Even Summers realized this -- but not, apparently, the White House.  Could Obama's tone-deafness on the Fed steer him toward a choice other than Janet Yellen?  He has virtually no option -- she's now the clear favorite -- and the markets will get a more predictable policymaker than Summers would have been.

This is interesting because Valliere is very close to Kohn. IN FACT, Kohn works as a senior strategist for Potomac Research Group.

Hmm...

and....

http://ca.news.yahoo.com/geithner-still-not-interested-being-fed-chair-source-011631394--business.html

WASHINGTON (Reuters) - Former U.S. Treasury Secretary Timothy Geithner is still not interested in being the next head the Federal Reserve, a source familiar with his thinking said on Sunday, after front-runner Lawrence Summers withdrew his name from consideration.

The source, who declined to be identified, said Geithner remains firm in the view that he expressed back in January, when he stepped down from his post at Treasury, that the next Fed chair will be "someone else's privilege."

Former White House advisor Summers unexpectedly withdrew his name from consideration for the Fed job on Sunday, which President Barack Obama accepted.

Summers' decision followed a bitter campaign mounted by members of his own Democratic Party against his nomination, based on criticism of his support for banking deregulation and comments in the past they viewed as sexist.

Geithner is a close Obama confident who has been persistently talked about by Fed watchers as a candidate to replace Ben Bernanke, the U.S. central bank's current chief, when his term expires in January.

This speculation has refused to die, despite Geithner's public comment to the contrary, and the fact that he is writing a book about his time in office.

Summers' Season Is Over: The Morning After

Submitted by Tyler Durden on 09/16/2013 06:43 -0400

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Now that the market has had a day to digest the Summers news, its conclusion is still the same: the man who deregulated and was on Wall Street's payroll for years (when he was not busy micromismanaging Harvard's endowment) and yet was somehow supposed to be Wall Street negative by bearing "hawkish", would have been bad for stocks. And while there was not a correction per se associated with the Summers' appointment or rumor thereof, the fact that he is now out, is even more bullish for stocks, and the correction that never was, can be uncorrected, sending stocks to new record highs, and all EM trades which had unwound modestly on fears of an end of the Fed carry trade, are getting rewound, even as gold has retraced all gains since the Friday fixing because while Yellen is pro-printish, she too is expected to be able to unwind any resurgent inflation in precisely "15 minutes." Here is what else is being said.

COMMENTARY

• Pimco’s Gross says stocks should do “very well”; Yellen regains front-runner status
• Krugman says “nobody else as qualified” as Yellen
• Markets may see Yellen as shoo-in: NAB
• Yellen may not become Fed Chair: Capital Economics
• Yellen as Fed Chief may lead to weak dollar L/T: Commerzbank
• Policy differences among candidates small: JPMorgan
• Summers pullout adds to USD pressure before FOMC: Morgan Stanley
• EU currencies likely to be bought: Citi
• Decision to support Asia FX: Credit Agricole
• Summers’ exit could spur knee-jerk rate rally: Barclays
• Summers-led flattening may reverse on taper concern: Commerzbank
• Decision may delight emerging markets, risk markets: IG
• Julius Baer also sees boost to emerging market equities
• Summers exit positive for markets: Aberdeen Asset Management Asia
• BOT-Mitsubishi UFJ economist Rupkey sees possibility of Bernanke third term, Yellen “even more dovish” than Bernanke
• Summers’ exit removes uncertainty in market: Eaton Vance
• Decision boosts rate doves: Manulife
• Yellen as Fed Chief may lead to weak dollar L/T: Commerzbank
• Withdrawal means ‘great deal of certainty,’ Rivkin says
• Yellen more prepared to keep up QE: Jerram

MARKET REACTION:

• Bunds lead gains in Europe bonds after Summers quits Fed race
• Pound climbs to 8-Month High on Summers withdrawal; gilts rise
• EUR/USD +0.4% to 1.3350 vs session high 1.3382
• S&P 500 Futures rise 1.24% to over 1700
• Asian equities gain; MSCI Asia Pacific Ex-Japan Index +1.4%
• Dollar drops vs yen; won at six-mo. high
• 2Y USTs -5bps at 0.3830%; 10Y -7bps at 2.8162%
• Oil falls, gold falls

Source: Bloomberg

24 HOUR GOLD

24 HOUR SILVER

but consider gold and silver  earlier - the initial reaction....

Futures Soar To All Time High On Summers' Exit

Submitted by Tyler Durden on 09/15/2013 - 18:08

"The (potential) hawk is dead, long live the doves," appears thechorus 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.