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Up, down, up down. To say that the stock market has been
volatile over the last week is like saying King Kong was big monkey. It’s
true, but it doesn’t really give the complete picture.
Investors and traders really don’t seem to know what’s
coming next. I’ve tuned into CNBC a few times during the trading day recently, and you can see the
frustration on the commentators’ faces. It’s as if they know that, no matter
what they say, they will be wrong.
This market is experiencing indecision in its purest form.
Is the U.S. economy still improving? Or is the
relative weakness of economic data from the second quarter a sign that the
recovery is fading?
Economic recovery does not move in a straight line. And this
one has certainly been two steps forward, one step back. But if the second
quarter was a “one step back” quarter”, we should expect the “two steps
forward” part soon.
Even Fed Chief
Bernanke seemed unsure during his testimony before Congress yesterday. And I
can certainly think of a better way to describe the economic outlook than
“unusually uncertain.”
That’s not what we want to hear from our Fed Chief. If
there’s weakness, he should be aware of it, be able to describe it, and point
to how and when it will end.
Bernanke didn’t do that. Instead, he sought to reassure
investors that if the recovery faltered, the Fed would be ready with new
stimulus measures.
Wrong.
Show some confidence, Ben. Investors want to hear that the
economy is improving, not that the Fed is “