If You Don’t Know George Costanza You Don’t Know Diddly

Days like today represent why Wall Street is NOT Main Street. The Fed essentially downgraded its outlook for the economy to come more into line what certain sources (hand raised) have been preaching. Bill Gross on CNBC (information is power) essentially said the Fed will lower growth forecast from 3% to 2% (a little birdie told him…let us skip for now the fact our crony system allows legally for men like PIMCO to know what the fed will do before the peon class). And despite the “end of the recession” (1.25 yrs ago) the fed requires exceptionally low rates for an extended period of time.

All pretty bad for Main Street.

But put on your George Costanza hat because a change in language towards more steps to pump the world with US dollars was thrown in. Which is all Wall Street wants because it can goose assets of every stripe and color.

Even Mr. Gross admitted as such when he said how powerful QE1 was in stoking the stock market. He literally laid out the start date and end date of QE1 and tied the stock mkt performance to it. Then said once it ended the market…left to its own devices…fell 15%. These are identical comments as laid out on these virtual pages.

So we have a quandry….those who bet against or underestimated QE1 were shocked by its effectiveness not in helping the economy but creating ponzi level prices in assets. And soon we go again on this trip so being accurate on economic forecast will once again mean diddly. It is not your daddy’s market anymore…now it is all about the Fed attempting to create a 3rd bubble in a decade since bubble creation is the only solution it knows..

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

Visit: Market Montage

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