What more can they possibly do? Markets are up what... 100% from March 2009 and the Fed is still treating the economy like it's on life support.
Markets Tumble. How Will The Fed React?
[at Seeking Alpha] - The financial markets are not being kind to freshly minted Federal Reserve Chair Janet Yellen. The level of scrutiny she will face when she makes what is likely to be her first public appearance as Chair ...
http://us.rd.yahoo.com/finance/exter...t?source=yahoo
What more can they possibly do? Markets are up what... 100% from March 2009 and the Fed is still treating the economy like it's on life support.
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You asking me or Tim?
Bottom Line: The Fed is once again in a familiar place. They try to pull back on policy, and markets tumble. Tightening has repeatedly proved to come too early; one wonders if the Fed would have had to keep doing more if they didn't keep promising to do less. If history is any guide, they will eventually reverse course. But that same history would suggest that they need to see conditions deteriorate further before they act.
You, I just don't see the correlation as all of my consumer staples costs are up (Fed says there is no inflation). President says that the long term unemployed need to have more benefits (if the economy is improving, more should be able to find jobs). The market is on a tear, but that only helps the rich, right?
Anyway, I don't think the market being up tells me the economy is good... there is no correlation...
Rules:
- Trade what you see, not what you believe
- Don't put stuff in your signature that a Mod doesn't like
"Government exists to protect all people’s rights, not some people’s feelings." - A. Barton Hinkle
Great Tools:
http://www.CreditKarma.com
http://www.Mint.com
http://www.SaveUp.com/r/nmJ
My consumer staples are up too, but there are complex dynamics at work. For one, ETF's have allowed anybody with a brokerage account to purchase commodities leading to more demand. Second, pension funds made the decision in 2009 to diversify into commodities. These decisions are not made in haste. To dump this allocation would take a vote from the board. Third, hedge funds buy futures which drives up demand. None of the three take possession of these goods but again, more demand on the market. Finally, HFT's will go anywhere to benefit from that .01 bid/ask spread.
He'll do anything for 'likes' or high fives. Isn't he considering raising minimum wage? Everybody knows that doesn't work. Maybe a negative income tax on the 'poor' would work, but I can't see anybody prudently spending a windfall.
As far as the market being up, check out 'the wealth effect'. Look at the emotions of some people when their PIP is higher than someone else's. They feel special, smart, wealthy. When it goes down 2% they're in panic mode.
Never said there was any correlation with the market. I'm bearish on the market and am highly critical of our service economy, but while unions call it job destruction, I call innovation and streamlined progress.
Why did Easy Al cut rates in 1987, 2000, and then Ben in 2008? The cuts were made well before a jobs report or any economic numbers came out.
It's all about the stock market and wealth effect baby. Check out Irrational Exuberance by Robert Schiller.
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