The Market Speaks: Addendum

by Steven M. Cohen  •  Feb 17, 2009 at 1:06 pm

http://www.buyselljump.com/2009/02/addendum

The market has just shed about 4.5% and closed at a level not seen since last November 20. Volatility, as measured by the VIX, jumped nearly 13% just in today's session.

As stocks were sliding, our new president signed the "stimulus" bill with huge fanfare. The disconnect between Congress and the president, on the one hand, and the stock market on the other, continues to widen.

A number of talking heads attributed the market's weakness to worries that the vast new spending bill would not be "enough" to reignite the economy. Here's an alternate opinion that I didn't hear voiced once today: The market simply hates the stimulus bill. It sees through its bogus billing to its real purpose, a reassertion of liberal political dominance at the expense of genuine constructive policies designed to arrest the unemployment spiral and stabilize the economy.

It has been pointed out more than once that there is a feeling among many investors that the lunatics have taken over the asylum. That may have much to do with the apparent desperation saturating the markets, a growing hopelessness created by the sight of politicians lurching about with little apparent direction other than to manufacture a quantum leap in spending to unprecedented levels.

The stock market can't stomach the haphazard manner in which Congress and the new administration concocted this purported solution to our economic woes. It begins to look as if the market is responding not so much to problems in the economy as to its revulsion at politicians who are busy making things worse.

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