Latest economic statistics are very good for the economy. The GDP numbers were revised to indicate the fastest growth since the first quarter of 2012 just before the economy stumbled over the self-inflicted wound of the shutdown. Even with the shutdown, payroll processor ADP released figures that predict very good employment numbers tomorrow.
So, naturally the stock market is going to open down today. I am not making this up. You can watch the economic news and every time the economy shows strength, the market takes a short swoon.
This is because the Fed has promised to "taper off" quantitative easing--that is, cheap money--when the economy is strong enough to, as it were, kick off the training wheels.
This is one of many reasons why it's a shame to have pushed the Fed into fighting unemployment with monetary tools, something Congress forced by refusing to employ the customary fiscal tools.
The interests of Wall Street have achieved negative correlation with the interests of Main Street. Good news registers in the market as bad news and the paper pushers on Wall Street, some of them, have lost what interest they ever had in the real economy.
Then they get offended if we peons get disinterested in the dips of the Dow Jones. They say we're ignorant of how the economy "really" works. They point at our rallying 401(k) or IRA numbers and argue for moving Social Security into the private stock market.
I personally intend to load up on investments that will be hammered by the "tapering," like REITs, and wait more or less patiently for Wall Street to get back in synch with Main Street. It will happen.
Short term, though, Congress is damn lucky that most peons really don't understand fiscal policy, because if they did we'd see pitchforks and torches in the streets. Congress made this disconnect happen by refusing to stimulate the economy, causing short term unemployment pain and long term pain when we have to repair our infrastructure after the tapering is done and interest rates have risen to what the market will bear.
The stuff that needs fixing--bridges, roads, and my pet cause, the electrical grid--is not going to get better by itself. Workers in trucks wielding tools and paid by tax dollars are going to have to fix it. Those workers could be on the job right now, with money borrowed at historically (and artificially) low interest rates.
But no, we will do it later, when interest rates are higher, lest President Obama be credited with the improving employment numbers and therefore improving tax collections and therefore lowering the deficit.
Call me ignorant, but the more of this nonsense I see, the readier I am for the torches and the pitchforks.