So, the Spanish Bailout rumor, which rocketed markets to their best weekly gains of the year, were faded on the news of the $125 billion bailout. It looked like the European Bailout Committee may have reached the point of diminishing returns.
But what was I thinking? It is simply a ridiculous assertion to think that markets, in their infinite wisdom of always being “right” would begin to reflect the reality of the European Banking Cartel coming to a ignominious end.
There is just way too many expectations and hope that Chairman Bernanke will fix the problems with money. And once again, the expectations are for economic news to be so bad, and the fundamental and monetary situation to be so dire as to guarantee trillions in newly minted money to save Banks, Investors, Inside Traders and Chinese Party Members.
And today, with Jamie Dimon of JPM strutting on Capital Hill and proving how smart Wall Street is compared to our elected officials (losses be damned), market participants (long only) get another free pass.
Everyone’s eyes are peeled to June 20-21 when our Uncle Ben will save the day. Heaven help us if he doesn’t.
7 Responses to REALITY CAN WAIT, yet again.
Weak PPI data might have given Ben all he needs to go ahead with QE3.
Haven’t we been here before. Deteriorating data, but no action until market blows up?
scott what r u investing in? i am still mostly cash. with gld as my only stock. (so to speak)
Like MJ in 1995, “I’m back”
Economic data points aren’t relevant in a liquidity driven environment.
The 12 day window between the Spanish bailout anouncement and June 20 Fed meeting is an important period.
As such, the two week window between bailout news and Fed meeting gives Bernanke and Spanish banks enough time to make decisions with rational analysis. Spanish banks along with their auditors and lawyers are simply validating more assumptions before closing the deal for aid. Once Spanish banks have worked up a formal offer to present to ECB, they will sell hard. A good businessman understands the trade offs of their decision. Have you read the 48 Laws of Power by Robert Greene?
JPM testimony is not relevant either unless you worked with the CIO. Dimon won’t snitch on any members of his team. Otherwise, QE2 set the fundamental framework for basel 3 capital requirements and bank regulation. JPM testimony is another milestone in the compromise between regulators and banks. That’s it.
Otherwise, third iteration of strategy remains beyond our grasp. But more importantly, the Fed has the ability to think more clearly about the future with foresight and pragmatism and act quickly on those conclusions over over the next week.
Okay, you can all now go back to jacking off to the Jamie Dimon Hall of Fame Induction Speech on C-SPAN.
We have no leadership capable of telling people that economic recovery is going to take hard work and not financial tricks.
QE3 will be timed for maximum effect on the November election.