I in fact welcome this kind of day since it will put us on the road to MOABO. The only way it could be any better is if my broker dealing allowed me to short the indices in my retirement plan but they do not. Barry Ritholtz over at the Big Picture explains why Congressmen like John Flemming are complete morons:
I suspect the Fed’s blunt language was telegraphing a message to Congress. Rates are at zero, mortgages are at 60 year loans, and yet demand simply is not there. The Fed has done pretty much all it can do. As we noted yesterday, responding to the weak economy at this point requires fiscal policy, rather than further monetary approach. “The Twist” and purchases of mortgage-backed paper is an attempt to rates down even further. It is hard to see how that can be effective in the current environment.
Don;t expect a policy response from the Austerians. These misguided politicos are in charge in D.C., despite having gotten the past few economic cycles precisely backwards. During the last expansion (2003-07), instead of raising taxes and cutting spending — managing the deficit, creating a better private/government spending ratio — the hypocritical deficit peacocks in the USA did the exact opposite. We cut taxes during (2) wartime, created yet another entitlement program, and raised yet other government spending during private sector economic expansion. Continue reading “Folks I get the feeling today is gonna be ugly on the markets”