Fed reports, McCarthy departs Speaker race, markets confused

Investors have a basket of headlines to deal with Thursday, as Fed report fears international slowdown and Boehner-supported successor McCarthy drops Speaker bid.

U.S. Representative Kevin McCarthy (R-CA) and family. (Image from the Majority Leader's website.)

WASHINGTON, Oct. 8, 2015 – After yesterday’s confusing trading action, investors likely were expecting a bit more clarity after the release of the Federal Reserve Bank’s latest minutes at 2 p.m. Thursday.

According to a summation of the document on CNBC, “The U.S. Federal Reserve thought the economy was close to warranting an interest rate hike in September but policymakers decided it was prudent to wait for evidence a global economic slowdown was not knocking America off course.”

Well, it doesn’t take a rocket scientist to figure this one out. As we always suspected, the Fed really really wants to raise those interest rates and probably still does. But the collective fiscal profligacy of faux socialist governments around the world, led by feckless, greedy, oligarch-owned politicians with less integrity than a house of cards is making the resumption of any kind of normal, legitimate fiscal policy nearly impossible to achieve.

Market optimists, at least momentarily, seem to be regarding this as the best of all possible worlds for the bulls. If it’s not the opening for another round of QE, at least it’s the next best thing, which would be essentially doing nothing. That’s despite the fact that this may be leading us inexorably toward a complete lack of liquidity in the markets.

Even so, there are probably ways for politicians and others to kick that fiscal can down the road once again, a prospect that may not sit too well with an increasingly divided House of Representatives here in Washington, D.C. We’ve just learned from several sources that current but outgoing House Speaker John Boehner’s designated successor, Majority Leader Kevin McCarthy, R-Calif., has taken himself out of the running for that office.

McCarthy has apparently failed to bring enough of the House’s 40-odd die-hard conservatives on board with his candidacy and further damaged his chances earlier by making impolitic (but correct and appropriate) remarks indicating that the House Benghazi hearings might just have a negative effect on the presidential candidacy of Her Hillaryness.

The truth is a bad thing to say in DC, and the press immediately leaped on this “partisan blunder,” damaging McCarthy’s already shaky candidacy. We’d observe that the media’s treatment of vastly worse Democrat blunders (Harry Reid’s anti-Semitic slurs, Joe Biden’s inappropriate shoulder rubs, Hillary’s illegal emails and reprehensible actions during Benghazi etc., ad infinitum) never got close to its savaging of McCarthy.

But then again, as I explain (uselessly) to all Republicans, if you don’t behave, 24/7, like St. Francis of Assisi in your public and private life, you will be ruthlessly attacked and no one will defend you. But there’s little point dwelling on the obvious here.

And besides, the Maven essentially sides with the conservatives and libertarians on this one: namely, what the hell is the point of voting in a Republican Senate and House if the clowns you elected don’t at least halt the Decline and Fall of America, courtesy of our (hopefully) first and last socialist, post-colonialist and pathologically narcissistic president?

We may eventually get an answer to that one. But right now, official Washington is thrashing about on both the fiscal and political. At the moment, Wall Street’s wounded bulls seem to be getting excited about the mess in DC, perhaps figuring that a completely disabled political system might finally, by default, get out of the way of making money.

In any event, the Dow is up around 100 points as of about 2:45 p.m. EDT, with the broader based S&P 500 up 10.83 or so and the currently wobbling NASDAQ up a mere 2.91—not very impressive after its recent drubbing.

We’ll hold our trading fire this afternoon. You often pay for nicely bullish days like today with double the punishment on the morrow. But foolish optimists that we are, we continue to look for bargains in the stock market, hoping they won’t turn out to be even greater bargains, but after we buy them.

So we’ll hold our fire for now and wait to see if a really trend is about to develop to reverse 2015’s almost unrelieved investing misery.

Congressman McCarthy at an oversight hearing of the House Natural Resources Subcommittee on Water and Power.

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