The Fed walks into a bar.
The bartender doesn’t ask the Fed what it wants, because nobody can afford to go drinking anymore since all their money isn’t worth a damn, even as prices for just about everything are going up, and therefore the bar is closing down.
“A glass of Minervois,” the Fed says darkly. The bartender, surprised that it drinks wine, still picks up on the hint. Out of a job anyway, he converts his meager savings to euros, moves to the Mediterranean coast of France, and lives a mediocre life.
What, you wanted serious Fed commentary? Fine. The Fed cut rates again, for no good reason. Stock indexes didn’t particularly like the decision at first: the Dow dropped 100 points right away. Then, everybody changed their minds, and the Dow closed up 137 points. Bonds, still the closest thing we have to adult supervision, moved the 10 year Treasury up 2%. When bonds are up and stocks are up like this after an announcement, the safer bet is to go with the adults, and expect that stocks will either tread water or move back down in the immediate aftermath.
This isn’t a macro blog, and we don’t have the energy for a long discussion at the moment. Suffice to say that there’s a double entendre in the title of this post: besides the stupid thing above, there’s also the sense that the Fed is just yanking our chain (how could they seriously believe a cut was needed?), and that this particular joke is decidedly unfunny.
In other news, our open positions are in fine shape, thankyouverymuch.
Finally, deliberately stealing a page from Bill Luby’s tradition of VWSI wine pairings: for a silly Fed rate cut and an increasingly precarious economic environment, we recommend the liquorice notes of Domaine La Tour Boisée (the Minervois, of course), and, if you need some music to set the mood, The Reminder by Feist.
[tags] Fed, market commentary, Dow, bonds, wine, Minervois, Feist [/tags]