The Taper Marches On

We all know the Fed Decision now. The MBS and Bond Buying Program is cut back by 10 Billion Dollars a month even though relatively bad financial news was prevalent in recent releases. The Stock Market reacted by selling off from about S&P 1781 to SPX 1770.45 afterwards, then closed at 1774.20 in an hour and a half  of mixed trading. It was off 18.30 points for the day. This went down again after recovering much ground from the recent Thursday through Monday Morning selloff. The Asian Markets are down a percent halfway through the session at 10PM Eastern. It is a worldwide thing now as every central bank follows suit and tightens monetary policy. Not as tight as Turkey, but tightening nonetheless.

Now is the time for the markets to pout like a child being relentlessly drag-marched past the candy store window with no pause. We are into a new era of dialing up the Wah-mbulance 111 as the correction comes, but may not go as soon as they have for a banner 2013 market year performance. Cushy Fed Policy has taken a sidestep and the novice bicycler has to pedal. Old folks are cautiously optimistic as they watch the reaction. Some are old enough to remember 1934 all too well, but were comforted that Ben Bernanke was spending his whole academic career preparing for such a second take at the Depression.

Should one doubt the worldwide effect this Federal Reserve Policy would have, they can see now. Emerging markets are also tightening up and turning the lights on at the party. The Fed has ruled the roost nearly since the Airplane became mainstream, and presided over the money since before even the USSR was formed in a badly failed shot at a money-less society. Marx just ignored that part. It kept score over a couple World Wars and the rise of the automotive Hydrocarbon Economy. It still stands after several successive failed attempts at establishment of a tweaked "Good German Political System," to go with the refined money system born of Frankfurt Goldsmiths.

Ben is off to retire to the speaking circuit now and to write his memoirs after presiding over the 2008 Financial crisis. Enter Janet Yellen, another Fed board member, and the juggernaut goes on. We will have to wait and see where this all settles as time marches on. A bear market may be on us but for how long is unknown.