That was an ugly close for the second session in a row reflecting a number of things including a fair amount of confusion, matched or surpassed by frustration. I continue to say Fed news should be interpreted as a red flag for the US economy. It reminds me of a fancy electronic air pump I bought last year.
The engine was impressive, and the sales guy said it could fill up a truck tire in minutes. I finally broke it out early this summer as we prepared to go bike riding. I plugged it in, and the motor was humming. I Inserted the bike tube ... nothing. I tried over and over again, but nothing.
I finally came to the realization that the tire couldn't be pumped up as there was a serious and irreversible flaw. This is the dilemma facing the Fed, which can only print but can't get those funds to Main Street. The problems are policies the deter success and rhetoric that just makes people want to go somewhere and hide. While the blame game may have gotten President Obama reelected it's weakened the foundation of the nation into something akin to an indifferent mush. People are bombarded each day with excuses or news people fear by the very leaders we elect to give us confidence.
There is no confidence, and it's wearing down on Main Street. The Fed is worried about deflation, so the notion of hiking rates or even tapering seems farfetched. On the other hand, Bernanke is coming to the realization that all his efforts have come up short. Economies are cyclical, and Fed-led rebounds are written into each script, but this time there are still so many areas of the economy lacking, including declining real wages (remember true inflation is too much money chasing too few goods). There probably is some kind of Fed etiquette also that would prohibit a change in policy as the torch is being passed along.
The flat tire is perhaps the best symbol of America these days. It reflects our lack of confidence and the inability to get out of first gear. The flat tire is also a great symbol for the Bernanke Fed that gave it the old college try but couldn't overcome attempts to transform America into a collectivist nation without winners or losers and where earnings are shared by the masses. This is happening more and more each day, resulting in less effort by those that care ... and don't care.