A brief word about Claire Bennet, the sweet cheerleader on the TV series, Heroes. Claire, you may recall, was capable of self-regeneration. In other words, Claire needed no physicians: she healed herself. Claire, unlike the U.S. economy, was quite good at this.
Speaking on CNBC recently, Robert Farzad of Business Week magazine suggested that we're not allowing the patient, the U.S. Economy, to experience the pain it necessarily must feel before it can regain good health, a process that entails the pain of deleveraging, which naturally follows a burst credit bubble of grotesque proportions.
Nouriel Roubini, a trustworthy voice amid market mayhem, says the patient mostly needs a $400-billion stimulus tablet.
Now, the clowns - TV talking heads and newspaper headline writers. These people are infuriating.
For example, they insist upon a correlation between the market's daily swings (up or down) and financial news. There is no correlation! Today's volatile markets behave, for the most part, incoherently and have very little if anything to do with accurate stock valuations. Some claim markets are driven by cycles; moods and emotions so deeply embedded in the collective human psyche that unwinding them is like unwinding an AIG CDS.
Wednesday's 900-point gain was due entirely to arcane technical factors. The market's anticipation of a mostly symbolic half-point cut in interest rates had nothing to do with yesterday's rally. The worst consumer confidence report in decades certainly (hopefully) had nothing to do with the rally. You can bet, however, that had the market gone down, say, 900 points yesterday, the dreary consumer confidence news would have become a headline scapegoat.
On CNBC this morning, a talking head moderator babbled on about her "pet peeve of the day" - low interest rates. She said that too-low rates got us "into this mess in the first place, so why lower them more? Again!" To the best of my knowledge, she was being earnest. Her astonishment with remedial economic principles reminded me of simple, sweet Claire the cheerleader.
As I write, the market is up 2 points following news of the Fed's half-point cut and pessimistic statement on the economy. If investor indifference holds, surely someone on CNBC will later explain that the Fed's action was previously "baked in," and therefore had no effect on an all-knowing, uber-efficient stock market.
The best analysis on CNBC today came from a regular who noted that October's market antics belong in Rod Serling's twilight zone. No one has any idea what's really going on! Well, Roubini does. And a few others, I suppose.
Unlike Claire, gloomy humbugs don't make good market cheerleaders on CNBC. (Erin Burnett and Mark Haines do tell it like it is, however. Kudos to them both for not sugar coating and over analyzing!}
Whoops! Now it's UP over 250 in the final hour of Wednesday trading only to close DOWN nearly 75. Furthermore, this erratic swing had absolutely nothing to do with anything other than fear and panic, our constant companions in these days.
"That's the sign post up ahead, your next stop...The Twilight Zone!"