Ben Bernanke seems to think that a few more mistakes ...
… by him won’t really matter anymore but it is sad that he has convinced Washington to assist him on his path of destruction.
The U.S. economy screams for a recession and the financial markets are down on their knees and beg for a bear market and the more policy makers and anyone else will deny the markets what they want the worse things will get.
The more Bernanke and friends decide to push against the market forces the harder they will push back. Many of the problems have been created by market participants and actions the Federal Reserve has taken over the past 12 – 18 months or since Ben Bernanke took over. The problems have started before that and have been elevated ever since then.
The stubborn bullishness has added to the problems and the ignorance by the majority has not helped at all.
The sooner those individuals who attempt to fix the problems they have created stop the interference with the markets and give them what they want and need the sooner the problems will be solved. The markets work best with no interference.
There may be a plan announced tomorrow an ‘economic stimulus package’ but that is very likely to have very little or no effect at all.
The Philadelphia Fed Survey today showed that conditions have accelerated to the downside. Even worse for the Federal Reserve is the fact that Prices Paid have surged to a multi-month high Prices Received have also surged to multi-month highs which point to the potential of an increase in consumer inflation. The outlook six months from now shows similar readings and suggests that the problems may stay here longer then the majority expects.
The Empire State Index supports the Philadelphia Fed Survey and paints a similar picture. The PPI and the CPI released earlier this week show that inflation should not be ignored and has picked up over recent months. Ben Bernanke, hopefully in a final desperate attempt that will back-fire like all other measures he has attempted, will lower interest rates once again and now the government, who is known to mishandle situations like this and is clearly not the entity that anyone desires to take measures when it comes to fiscal management and monetary decisions, will announce a plan that will add to problems that the U.S. economy does not need, not now and not in the future.
Ben Bernanke seems to have lost interest in the destruction of the U.S. Dollar, but his soon-to-be rate cut or even rate-cuts will try to give it the final knock-out he desperately seeks, and puts his focus now on the total destruction of the U.S. economy. Why not, if you mess up mess up in such a big way that it will not be forgotten for generations, right?
The economy screams for a recession, markets beg for a bear market, the U.S. Dollar is basically worthless, inflation is accelerating, Ben Bernanke and friends try their best to make things worse so is there anything else?
Equities are still ridiculously over-valued. True, P/E ratios are low but P/E ratios are as worthless as the U.S. Dollar with the difference that they always were and the U.S. Dollar needed help to get there.
Do you want proof that P/E ratios are worthless?
All you need to do is look at all mutual funds that use P/E ratios as one of their major arguments to buy into markets. Oh, right. They have a time horizon that will outlive their investors (that is a slight overstatement but the point made is clear).
Today’s market action delivers a clear message:
We do not trust any plans that may be announced over the next 24 hours.
There is a healthy pull-back which may continue for a while, along the road we will get small rallies to get out of extremely oversold conditions but each time a lower high will be reached and a lower low will be the result of the next leg down.
There are tremendous profits to be made, regardless of the market conditions but it is up to management and their teams to realize those profits for their clients.