Friday, March 7, 2008
Why does it seem so Bad?
If you are saying to yourself that it seems like the market gets worse eveyday, you are not alone. If you have been following our posts we have guided one through the warning signs that the market has been producing and today's employement report just tipped the scales in favor of the fact that we are now in a reccession. What makes matters worse is everytime Bernanke lowers the Fed Funds rate it lowers the dollar which in turn raises the price of oil. Today's move 15 minuets before the job report was released that it will boost the size of auctions planned for March 10th and March 24th to $50 Billion dollars, shows a bad timing issue with the Fed and how they deliver the news. When it hit the wire about their plan to boost auction size was a major tip off that the Jobs report was going to come in worse than expected. I feel like I am watching a car wreck as it is happening. If I were a gambling man, I would love to play against Bernanke for he tends to show the ladies before he makes the bet. Big picture time, Boomers are about to retire, market is melting like ice cream, Mortgages are what started this whole mess, and Banks for the most part are insolvnet. The Fed needs to let the market weed out the weak and let the strong survive. We all know the saying. "It gets worse before it gets better." But I wonder if they ever considered the fact that if the Fed keeps pulling the bandaid off the wounded economy will it ever heal?