After the Fed’s cowardly capitulation to the Wall Street gamblers last week our clueless monetary politburo got quite the surprise. The post-announcement “rip” lasted all of 90 minutes, and by the market’s close on Friday the SP 500 was down 3% from Thursday’s algo-driven spasm and 8% from the May highs.
That even left my head spinning. On Wednesday afternoon I had told Yahoo Finance that in the event of no rate hike there would be a “short term relief rally” but that even “the gamblers were losing confidence” in the Fed’s con job:
………If the fed doesn’t raise rates, there probably will be a short term relief rally, but I think its becoming evident that even the gamblers in the casino are losing confidence in the Fed. Because however they come out this week, there will be signs of division, there will be evidence of confusion and indecision, and once that process begins to fully unfold, which it will for meeting after meeting as we go forward………(because) the Fed painted itself into a corner and has no clue how to get out…..once that process of division and confusion develops, the markets are going to lose confidence in the whole central bank bubble and were going to have a huge correction.
Alas, confidence was apparently so shaken by the Fed’s action that it’s as if they did ring a bell at the top. The relief rally got monkey-hammered on the spot.
Ironically the gong was Janet Yellen’s incoherent babbling at the post-meeting press conference. Over and over she said how everything is swell in the US after 80 months of ZIRP, and that the consumer and labor markets are nearing the pink of health. Nevertheless, she and her posse had elected to keep banging the Emergency Button, anyway, just in case something falters in Shanghai, Timbuktu or some other unspecified precinct of planet Earth.
Whether the inevitable thundering collapse of the latest and greatest of all
Originally appeared at: http://davidstockmanscontracorner.com/the-second-bullard-rip-they-do-ring-a-bell-at-the-top/