from gpc1981, Gains Pains & Capital:
The stock market is closed today for Labor Day.
A few thoughts on the preceding week:
1) The US Federal Reserve disappointed in a big way during its annual Jackson Hole meeting. It was in 2010 that Fed Chairman Ben Bernanke hinted at QE 2, which kicked off a large rally in stocks and other risk-on assets.
Investors and the mainstream financial media are desperate to claim he did something similar this time around. He did not. Instead, he issued the same message the Fed has issued for over a year: we stand ready to act if things get bad.
However, this has not stopped the media from proclaiming that the Fed has left the door wide open for announcements of QE at its September 12-13 FOMC meeting. This however is virtually impossible due to a) food prices, b) gas prices, c) the upcoming US Presidential election election and d) the fact that the banks don’t need QE, they already have ample liquidity sitting around (this is a solvency crisis, not a liquidity one).
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