My Goodness, the market is up a reasonable amount overnight, very much unchanged from Wednesday close, and there were many very positive things in the fed statement. "They will be monitoring the situation closely", which usually means an interim intervention. Remember, "the threat is worse than the execution". The statement of the Fed had many threats that they would intervene to buy assets with the slightest provocation. There was nothing bearish about what the Fed did, and only 10% expected the Fed to do something different. All this talk about throwing O to the wolves is non-market talk, like me talking about the chip industry when I know nothing about it. "The wish is father to the thought".

Gary Rogan writes: 

How can we judge by the market reaction whether the Fed did "all they could"? Of course in any rational universe the lack of immediate drastic action will be judged positively, especially with a slight delay, because just about any QE3 at this point is likely to be counterproductive. It also not THAT fantastic to suppose, and that has been done recently several times, that any conclusions about anti-O intentions will themselves be interpreted positively by the market.

When just yesterday Geithner was urging the Congress, not in so many words but clearly implied, to go on some sort of a wild spending spree to take advantage of the low borrowing costs, while paying lip service to long term solutions, would it not be reasonable to suppose that he would want the fed to undertake some major mortgage purchasing program? When Schumer asked for and DeMint warned against more quantitative easing two weeks ago, would it be hard to guess which one of them would be more satisfied with the Fed's immediate action or lack thereof?

If there is some fantastic jobs report announced on Friday and 300K jobs are created than it will be clear that that was the rationale. The actual ADP trend was down, so I'm not sure how today we can say with certainty that the Fed was being absolutely as helpful to the regime as it could be.





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