Aside from the market talk and very real view that declining confidence in centrally planned policy is key to coming market events, this post is for fun. Jeez, lighten up.  I know some readers just adore centralized policy making and interest rate manipulation, but the Fed has proven already that it does more harm than good.  The “Great Recession” doesn’t happen without the policy excesses that fomented it. 

Going on 7 years into an economic recovery/expansion, blaming global sources while seeing deceleration in domestic manufacturing, exports and now, payrolls after not normalizing by even a crappy 1/4 point?  Yeh, that’s just peachy.  I am all for being bullish if that is what is on tap.  Bad policy does not mean stock market bearish on any given time frame.  But it seems that Fed apologists have very constricted time frames by which they frame their views.  There is a thing called a big picture and it is littered with negative symptoms of centrally planned economies, both in the US and world-wide.

I am not advocating a Luddite-like return to bartering or even the gold standard.  I am simply saying that constant policy intervention is a sign that something is not right.  This is a global situation, but speaking of the US, which is my home, this chart says all it needs to say.  A large distortion has been bred into the market by abnormal policy.  This could prove very bearish or hyper bullish.  We just don’t know yet.  It’s all just prices and asset appreciation, after all.

Almost as entertaining as the market’s reaction to the event itself is today’s reaction to what a bunch of clowns pretending to be in control of the economy had to say about the economy and by extension their policy supposedly governing same.

Market participants, black boxes and substance abusers alike might want to keep a couple of things in mind; 1) inflammatory news events are fleeting in their effects (and look at how quickly the gold sector, one standing to gain from a weak economic backdrop and its implications for policy, head faked up and reversed down) and 2) after the FOMC Minutes release in September the market cheered and zoomed higher after the Fed punted.  It then immediately reversed into a downside leg that became the bottom re-test.

Basically, the same dynamics are in play.  The economy is starting to suck wind, rate hike hype is fading and for the moment the market is choosing to see this as positive.  Just like it did for the moment in September.  Maybe it’ll be different this time.  Or maybe not.

I am more bullish on the market than not when viewing the balance of 2015 for reasons noted in NFTRH…

1.  Sentiment was extremely over bearish in August and September; beyond extreme really, given the little blip that it attended.
2.  There have been hints that Q3 reporting will not be as bad as the market had supposedly anticipated at the Aug. & Sept. lows.  We noted an improving preannouncements backdrop.  It’s not a big thing, but it does imply the market may have bottomed out vs. expectations.
3. The simple technical fact that a sentiment and momo driven bottom was successfully tested and a ‘W’ pattern formed.

The market is technically bearish intermediate-term, but I think (think, mind you) that the bears’ power has been sapped for a few months.  We’ll see on that.

But as noted in an NFTRH update this morning, short-term sentiment is getting braver (right in line with the market’s recovery) by some ‘dumber’ contingents of market participants.  The time to be brave was September 28 and 29 not today.  Dumb money does things like cheer the fact that the Fed fretted about the economy and may not raise a damned 1/4 point that would not have mattered outside of psychology, anyway.

The Fed is very worried about global events.  Never mind the decelerating export and manufacturing sectors and recent lame employment reports.  It’s the Chinese doing this to us!  That irks me; how here in America we are treated like children and must not hear negative information about our own situation.  It’s China, it’s Russia, it’s Europe and most recently, it’s Japan.  See No Need to Add Stimulus, Machinery Declines Again.

This is all about confidence and our friends running the 3 Ring Circus can pile into their little clown cars all they want, bullhorn why to and why not to expect a rate hike and meanwhile, confidence wanes.  Today is just another small step in that direction.  Here’s the video again from a March post:  Peak Fed.

Do something for me; listen to this video and try to think rationally about the market at the same time.  You can’t do it, can you?  Bernanke, Summers, Fisher, Fischer, Bullard, etc.  Everybody’s got an opinion about tightening and meanwhile confidence continues to ease amid all the noise.

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Hilarity aside and playing it straight, this guy at CNBC gives a sound recap of the Minutes.

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Source: CNBC