Vinny: What's…what's this over here?
Cook: You never heard of grits?
Vinny: Sure, sure, I heard of grits, I just actually never seen a grit before
And the beat goes on with the GOP primary after Mitt Romney fell flat last night despite his attempts to connect with southern voters. His faux southern drawl and astonishment with grits, reminiscent of the scene from My Cousin Vinny didn't work, maybe talking about cheese grits was too over the top. In so many ways, the Santorum victories point to the fact voters are aware of issues beyond the economy and want someone they feel will not implement laws that mitigate or completely take away individual rights. The other storyline is Americans are rejecting political pandering. I can handle pandering over food and even colloquialisms but not when it comes to the economy.
Pandering, however, has become a national pastime and is no longer the sole possession of politicians and your good-for-nothing brother-in-law. The Federal Reserve has become the master of pandering, and Wall Street has become a master of enabling and encouraging such pandering. Hey, it works until it doesn't work. The one-two punch yesterday of the FOMC news and results from the so-called stress tests provided the catalyst the market had been seeking for a couple of weeks. It's true neither event was a surprise, but they offered green lights. For the market, it allows investors to play stocks knowing the Fed will ignore inflation and stay the course on accommodation.
For banks, it allowed the strong among them to escape the yoke of the government. Of course the test itself seemed dubious from the start. Heck, most banks paid back TARP with interest (although writing off tax losses makes the notion of taxpayers making money disingenuous) and have been begging lawmakers to move out of the way. Jamie Dimon cemented (maybe re-cemented) his reputation as The Man by letting the world know JP Morgan passed their stress test with flying colors. When the company announced a 415.0 billion share buyback (412.0 billion this year) and hiked its dividend to $0.30 from a nickel, it thumbed its nose at the Fed.
By punking the Fed, which wanted to release results of the Fed stress test after the close on Thursday, Jamie Dimon signaled banks in general may be ready to pump money into society. (They better be ready because more than half a dozen banks announced buybacks and or dividend hikes. This is going to anger those that hate the notion the rich get richer but also puts pressure on banks to lend more or as much as Dodd-Frank will allow them to lend.) The news sent the market off to the races-creating panic buying that's sure to continue.