1:50pm (EST)
Uncle Ben looks a little nervous today which is not helping the bulls.
The market got a nice pop at the open as Wall Street and the rest of the world awaited Ben Bernanke words of wisdom. The Fed Chairman is speaking to the zombies on the Hill and is updating them on a number of issues, including LIBOR, QE3 and the economy.
LIBOR looks and sounds like a fancy word and its stands for London InterBank Offered Rate which is the interest rate banks charge each other for 1-month, 3-month, 6-month and 1-year loans. There have been some well publicized headlines in recent weeks of the current LIBOR shenanigans and we were reminded today that Tim Geithner gave U.S. regulators a heads-up on the situation back in 2008.
Bernanke said the LIBOR setting system is structurally flawed but he provided no details on why the Fed hasn’t and didn’t make more public their findings when asked. The manipulation of rates is the smoking gain and Bernanke did a poor job of explaining the issues and what he really knows.
The Fed Chairman also said they were still looking at ways to address the weak jobs market and the economy. He believes QE1 and QE2 worked when he was asked about QE3 and if the first 2 have helped. Unfortunately, for the bulls, Bernanke failed to give specific details on what specific tools the next round of Quantitative Easing might be and when.
The market was looking for immediate gratification and a sugar fix it didn’t get and started to withdraw once it was apparent the Fed was saving its last bullet. The fireworks are just getting started and Big Ben will be speaking again tomorrow. The bulls might want to invest in some duct tape.
There has, however, been a huge rebound off the lows as the choppy trading environment we are in continues.
The Dow is up 90 points and is at 12,817 while the S&P 500 is higher by 10 points to 1,363. The Nasdaq is advancing 14 points to 2,911. Subscribers, check the Members Area for the updates and stay locked-and-loaded in case we send out a Trade Alert.