The stock market was very interesting yesterday. Unemployment went down. Interests rates moved slightly up. In spite of factors that may cause the Fed to ease Quantitative Easing the market rose. That is a little bit puzzling.
There are a couple of scenarios that would support this stability in the face of change. Actually, I can think of three. It could be that investors have become inured to the bizarre management style of the White House, realizing that the White house is totally divorced from economic reality. That they are so disconnected from economic reality, that they will see this as a vindication of their policies in spite of the fact that we are starting into our sixth year of non-recovery. If this is true, then the beat goes on and nothing changes. The hole gets deeper and QE continues. Remember, this is one point in time, not a trend.
The second option is that Janet Yellen is seen as so deep into Keynesian economics that she will continue QE in spite of any fluctuations in the economic basics. Frankly, this is my favorite theory. As "one swallow does not a summer make", one good day on the market does not a recovery make. She will keep those printing presses rolling and gutting the dollar faster than I can clean a trout.
There is a third option. Honestly, this is the option that will keep the economy stable and give us a chance to recover without a deep recession. If so, than maybe, just maybe, we can get through this and not have decades of bad economics.
Maybe the adults have re-entered the room. Maybe the strong money in the market sees that the market is not really oversold. Maybe they see that there is still some upside room. Maybe they see that profit taking is short sighted and real growth is still possible.
To make this happen the real movers and shakers in America must make their presence felt. We have been under control of the most amateurish administration of my lifetime. They are the gang that couldn't administer straight. The big money people have the power to bring them under control. And they should. No, they must if we are to continue as the United States of America and not some Euro look alike.
If they love their country and want to bring us back from the abyss, they have the power and the influence. Above all else this country needs a dose of sanity right now. That dose of sanity may well give us a way out, maybe.