Is Bernanke 'The Boy Who Cried Wolf?'
Editor's Note: Combining his passions for the markets, humor and food, "What's cookin' with Kenny Polcari" is a blog published twice weekly on CNBC.com. With more than 30 years of experience on Wall Street, Polcari provides insight and analysis on the markets as well as a recipe du jour. Buon Appetito!
The latest Federal Reserve policy meeting showed few clues about the timing to scale back its bond-buying stimulus and traders are getting a bit fed up—or as we say in Italian, arrabbiato, which means angry. Hey, that reminds me of a great recipe for pork arrabbiata, but we'll get to that later.
The Federal Open Market Committee meeting minutes showed absolutely nothing new. We remain data dependent and nothing has changed. So what gives? Remind yourself of Aesop's Fables No. 210, "The Boy Who Cried Wolf."
(Read more: Your guide to reading the new Fed minutes)
This famous fable tells the story of a shepherd boy (who might as well be Fed Chairman Ben Bernanke) who repeatedly tricks the villagers (investors or traders in this case) into thinking a wolf (tapering) is attacking his flock (markets).
The villagers come to the boy's rescue every time, only to realize he was not telling the truth (and the flock would rally again). In the end, though, when the wolf actually does appear, the villagers do not trust the boy's cries for help, and the flock is destroyed.
The moral of this story is one that we try to teach our children every day. If you continue to cry wolf, the villagers will grow tired and lose confidence in your cries.
Is this what is happening now? Are the villagers growing weary of the empty cries? Will the villagers end up forcing the wolf into the sunlight? I think so.
Again we saw the S&P attempt to rally to and pierce its 50-day moving average on Wednesday, only to be met by the "villagers" as they peeled some stock out of their portfolios and confirmed that the 50-day moving average is now real resistance as the inconclusive commentary continues to frustrate the markets. In fact, the transparency is cloudier than ever.
From economist Paul Ashworth of Capital Economics to Goldman Sachs, some of the biggest names on the Street understood the Fed minutes to mean a September tapering is likely.
I did not hear that at all. I understood the minutes to mean the Fed remains data dependent. For now, the data are not confirming any time frame, but it is coming, whether it happens in September or later on in the year remains to be seen. So get ready. And so it was written.
Pork Arrabbiata is Italian for angry pork, which is perfect for the mood of the day, don't you think?
The good thing about this Arrabbiata sauce is that you can use it on pasta, steak, pork, lamb and even chicken. Penne Arrabbiata is a classic pasta dish and can be found on almost any menu in a Southern Italian restaurant.
You begin with the basic marinara sauce. To make our sauce, we'll need:
- Plum tomatoes
- Grated carrots
- Grated celery
- Fresh basil
Add some olive oil to a pan with the side of a knife. Smash the garlic and then chop. Next, add to the pan and sauté. Then, add the diced onion and continue to sauté for about 10 minutes on medium heat, but do not burn the garlic!
Next, add the grated carrots and celery (maybe two of each) and continue to sauté for another 15 minutes or so. The veggies should get soft and almost begin to melt away.
Now add the plum tomatoes. If you want a chunky sauce, then "hand crush" the tomatoes and add to the pot. But if you prefer a smoother sauce, then run thru the food processor and blend well. Once you add to the pot, season with fresh basil, salt and pepper, and a pinch of sugar (think this is more psychological, but my grandmother still does it—so just do it).
Bring to a boil, then reduce to simmer, stir and cover, returning to stir occasionally. Should simmer on the stove for 30 minutes or so.
Now on to the Arrabbiata. For this, you need:
- Crushed red pepper flakes
- Olive oil
In a large sauté pan, add olive oil (just a bit). Then add some smashed/chopped garlic and sauté. Now add the pancetta and continue to sauté for about five minutes. Introduce the red pepper flakes—the more you add the "angrier" it gets, capisce? Now add four ladles of the marinara sauce and mix.
If you are making the pork, then season the pork chop with salt and pepper and then place on the grill. Cook for about three minutes on each side and then remove from the grill and add to the sauté pan with the Arrabbiata sauce and let it simmer for five minutes or so, bathing the chop as it simmers.
When ready, place the chop on a plate and spoon the sauce over the chop. If you are really in the mood for more Arrabbiata, then add in a side of pasta with the same sauce and plenty of fresh, grated parmigiana cheese.
Bring a pot of salted water to a boil and add the Penne Rigate (the one with the lines) and cook for eight minutes or so until aldente, meaning firm, but not hard. Strain, reserving a mugful of pasta water, and add to the large sauté pan. Mix well, allowing the sauce to permeate the pasta. Serve immediately in warmed bowls and have plenty of fresh grated cheese on the table for your guests. A robust red wine will complement this dish well.
—By Kenny Polcari, director of NYSE floor operations, O'Neil Securities and CNBC contributor, often appearing on "Power Lunch." The author is not compensated by CNBC for this or any other written materials found on CNBC.com.
About Kenny: Kenny has more than 30 years of experience on Wall Street. Currently director of NYSE floor operations on behalf of O'Neil Securities, he has also worked for Icap and Salomon Brothers. You can follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.
Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities, Incorporated or its affiliates.