“If I had a world of my own, everything would be nonsense. Nothing would
be what it is because everything would be what it isn't. And contrary-wise; what
it is it wouldn't be, and what it wouldn't be, it would. You see?”
Let’s face it; logic isn’t to
be found from the news. And, if you can’t make any sense of anything from it
making bold predictions, a hazardous pastime anyway, is impossible. If you
turned off all news sources and just watched the tape and inspected charts
everything would look basically okay for the major indexes. A 5-8% fall in some
since October highs is nothing to get excited about right? But, given the news,
you’d think the market would’ve crashed by now. That is not permitted methinks.
Bernanke was the headline speaker today but his comments were well
foreshadowed by his second in command, Vice-Chair Kohn, yesterday: “We’re going
to cut”, and that’s that. Inflation? We’ll deal with it later. That’s a green
light for gold and a kick in the teeth for poor Uncle Buck.
As was implied yesterday, if they don’t give a rip about
inflation now there must be something really scary going on that we don’t yet
know about. Ask yourself, are interest rates too high? Not a chance. You should
be concerned about what may lie beneath. If there isn’t much, then this group of
financial officials should be tarred and feathered for reckless oversight.
Breadth and volume today were unremarkable.
Today ended with a little “pump” to keep things looking
respectable. The trashing of the dollar seems irresponsible and unproductive. It
may help US stocks since overseas investors might view them as cheap in currency
terms. But, I don’t like it.
Clearly interest rates aren’t too high now.
Cutting rates further is just window-dressing symbolism.
We’re heading
to the end of the month and there are many vested interests needing things to
look better. Given the news, I’m surprised that indexes are doing as well as
they are. But the tape tells a different tale thus far in February.
Tomorrow is GDP data and it will be interesting to see the reaction to
any kind of number.
