Coming Up On Wall Street

Good morning. It is 66 degrees and with a promise of rain here in Upstate NY. I'm a fan of the 12 or so episode per year shows that have in recent years gained in popularity. They are higher budget, nicely edited and filmed, well acted, and carefully written with strong character development. The Sopranos might have been one of the first, I don't know the history. I watch on Netflix usually while I do technical practice on the guitar, scales and such. Lately I am watching "The Sons Of Anarchy." I won't go into the details but its essentially about tribal mentality where loyalty and a common group psychology suppress individualism and an internal need to explore one's own personal meaning if you will. Like the Sopranos its about a gang. Its also violent but its engrossing.

As we read about the state of the economy, we must remember that Wall Street although greatly under the umbrella of the vast world economy, seems to operate under its own economic system. Even though the American economy for the average person is difficult with a shrinking middle class, shrinking democratic expression, poor health care system, high unemployment into the foreseeable future, an erosion in housing assets, and an underlying angst, Wall Street is somewhat detached and creates large pockets of wealth within this otherwise miserable landscape. We talk about a Main Street and Wall Street disconnect. This is true.

Regarding the quality of Wall Street at this time, financial articles tend to be moody. The moods will swing from pessimistic to optimistic as economic data comes through the stream and affects the indexes and their direction.

Having said this, the linked Reuters article directly below is optimistic about the direction of the market. As far as I can tell, a financial writer could easily take the pessimistic position this morning and it would not be hard to find such an article on some other news outlet today. It can get confusing. Its important to try to find the kernel of importance that probably is contained within the article.

Here the talk is that the Fed will stimulate the markets with a new round of quantitative easing, that this seems to be an inevitable thing. A QE3 would make investors very happy as an accompanying rise in the indexes would follow. Take away the possibility of another QE and we are frantically searching for "certainty."

CNN: Investors seek certainty

In short, there is a basic assumption that at some stage more asset-buying quantitative easing (QE) to pump up markets and growth is on the cards, with the only questions being when and in what form.


Minutes from the Federal Reserve's latest meeting...suggested that the Fed may be closer to a third round of QE...