Are the 'Green Shoots' just spray painted by the Fed?
Well, the Dow fell a few hundred points this holiday shortened week to 8280. I have written endlessly and lectured endlessly about the 8200 level on the Dow. It is vital for the bulls to hold this ground. Bernanke is one of my most ardent followers as he has adhered to the interventionist strategy whenever we need a boost. I'm sure his alarm bells are ringing as I write. While we know he took the Thursday before the Independence holiday off (the Dow fell over 2%), he will be back at work on Monday.
In a nutshell, this is what we have left of a market. Trading volume going into the holiday is very light and the selling is not intense. There is no conviction. Traders are waiting for Bernanke to make his move. Traders are also worried that the 'green shoots' of economic recovery might just be spray painted by the Fed. Unemployment seems to be higher in every individual state that the reported national rate of 9.6%. We can assume that our pathologically lying government has under stated the actual number by quite a bit. The latest numbers were worse than expected even with an almost 200k addition by a wink of the eye and a flash of the magic wand known as the 'birth/death' ratio. So the market occasionally worries that recovery may not be as near as governmental liars and stock market cheerleaders suppose.
Maybe it's just me but I find it absurd to talk economic recovery when the largest state contributor to national GNP, California, is broke and handing out IOUs. Optimism is wonderful but in this case, unfounded. Unemployed, underpaid, debt-ridden people cannot boost an economy. Let me know when more people go to work. Let me know when California can pay her bills again. Let me know when Bernanke gets his foot off of America's throat. Let me know when Bernanke resigns or better, is fired. Let me know when the Federal Reserve is dissolved. Let me know when the government gets out of our life. Then, and only then, will we see economic recovery. Until then, slow death will become more of a worry for the stock market.