The market continues to be somewhat confused and probably a little exhausted. At this point, there are dynamic forces moving in opposite directions. Without a doubt there's an urge to take profits, and at the same time buying dips has been the trade of the year. Then there's the notion the Fed will remove the punch bowl but defensive sectors like utilities get smashed. Then there's economic data that seems like good news on the surface but less so upon drilling down a couple of layers. Then there's good old fashioned suspicion like the cover of USA Today: "Bull Run Gets Solid Footing."
Economic Engineering
I'm no fan of central banks printing or the kind of intervention that bailed out big banks and insurance companies with taxpayer funds. As a capitalist, the last thing I want is to go down that slippery slope of privatized gains but socialized losses. You see at some point that approach could be hijacked to make corporate profits part of the public domain.
It encourages terrible and reckless behavior and nullifies competition. Heck, since we all have skin in the game, maybe we could share in the record-breaking $40.3 billion in bank profits made in the first quarter. Actually, I'll make my own profits but would like to see banks begin to lend money since they're flush, have implied backing of the federal government and taxpayer dollars and get money for almost nothing which ensures easy profits. So, then why aren't they lending more? The industry says it's all about demand, but would-be borrowers say it's all about standards.
On the note, the Fed has to be delighted demand for credit card credit is climbing as this is the next step to get Americans to spend money.
The question is why would the Fed run such a risk to another bubble or continuation of a series of bubbles just to spark a small increase in demand from consumers? Is that who they're really trying to help or is it just a sales-pitch? Is it all about that first meeting on Jekyll Island and protecting a few giant banks and wealthy families?
On that note, I need to ask a question of fellow Fed-skeptics, but first let's talk sports.
Fore or Foul? 
First, let me tell you about watching television the other night while riding my exercise bike. Ever since the days of Mr. Robertson, and even as a child (I grew up in San Antonio a couple of times), I've been a big fan of the Spurs. That makes watching games difficult so I often flip the channel checking back periodically.
On Tuesday I was toggling back and forth between the game and the 1971 US Open golf tournament that was a barnburner. In fact, the Golden Bear walked down the Merry Mex on the last hole to force a next-day 18-hole playoff. On 18, Trevino missed a tricky yet makeable put when something dropped in the background making a crashing noise mid-swing.
In an interview after, Trevino was a complete gentleman saying he deserved a bogey anyway. Boy, he sure could teach Sergio a couple things about humility and sportsmanship.
One particularly long drive led an announcer to marvel how much farther Jack Nicklaus' shot went in the past, but he didn't mention if it was the equipment. This led me to think about all the inventions that have helped the sport over the years. So many inventions in fact there is no way to compare modern champs with those of yesteryear.
Like all facets of life, innovation and smart engineering made the game more exciting and at times more demanding.
The same can be said for every facet of life... innovation and engineering have made existing more wondrous. So, what's wrong with trying to use social or economic engineering to change lives or grow the economy? I'm playing devil's advocate in part because I think it takes more than ranting about the sky falling from Fed money printing; everyone should know why it's really a problem and why if the economy seems to be turning that is such an awful thing.
Although the market took it on the chin yesterday, retailers were star performers. Several beat the street and traded higher. I've spoken of the "Dropout Nation" and how it's created an in-the-moment climate that sees people preferring to go and buy stuff rather than save or invest for the future.
* KORS beat $0.11
* WTSL beat $0.01
* DSW beat $0.11
* MOV beat $0.06
* BWS beat $0.10
It's a crazy thing for sure but shows stocks always seem to do well in these economic climates. I wonder how many loyal shoppers of DSW or Brown Shoe ever considered buying shares in the company?
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