More Thoughts on Wackyland

Jobs Data Should Set Fed to Work: Heard on the Street – WSJ.com.

This author is so excited for a stimulus. Is there such a thing as a Fedosexual, by which I mean someone who derives pleasure from Fed stimulus?

We really are in Wackyland. Bad employment means bad consumption, which leads to declining economic growth. This should temper the buoyant stock market, but bad news means more stimulus. Traders have a Pavlovian response to more fed action, which leads to temporary rises in activity and value.

The writer here is trying to debunk the consensus that the Fed is not yet prepared to do something.. He believes that three months of poor employment growth should spur the Fed to act. I don’t think they are going to do anything, yet, but they are definitely floating these rumors and working behind the scenes to keep more stimulus in play so that markets do not deteriorate further.

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