Dennis Lucey

Best and Worst Performing Stocks Since the March 10 Bottom

Tony Soprano said, "Fed is doing just fine. Now we know why the Fed set up the TSLF and TAF."

Yeah, to fix the problems they created in the first place.

But, wait...besides the TAF and TSLF, the Street's betting the Fed will cut to 1.75-2% by May. This morning's CPI report will be the ammo they'll use to say that inflation worries are overblown (read: slowing economy counters rising prices of commodity inputs) and that it's OK to open the spigots like they did pre-housing bubble, pre-dot.com bubble, etc.

Austrian monetary theory shows that these up/down, boom/bust cycles are exacerbated by Fed actions.

It is folly to think that the malinvestment of the housing boom can be cured quickly or painlessly. It's inescapable that firms will fail as part of the housing bust, and as part of the price-correcting process necessary to get real investment funds, not Fed paper, back into distressed markets. The more the Fed tries to prop up the system, the longer the pain will be felt. We're at over nine months and counting...