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Another summer week in the books and the typical earnings volatility is present, much as was in April.  However, this time it's been "one-step forward, three-steps back".  Banks and GE led the market lower for the week.  Financials were down nearly 3% for the week.  We've had nothing good to say about investing in the largest banks.  A 9% drop in Bank of America on Friday over-shadowed the great results from Intel on Tuesday.

I'm not sure what the next 3 months will bring but I'm happy we've said "sayonara" the the 2nd quarter.  Actually April wasnt' so bad, with the market reaching its high on April 26th.  Since then, it's been straight down, or at least it seemed that way.  From the "flash crash" on May 6th to the repeated 100-point declines in June, this quarter has been one to forget.  The situation in Greece and worries about a slowing China economy added to any angst investors were feeling about pending financial reform legislation and the Government's inability to handle the mountains

Now is as good a time as any to start a dialogue on several things that concern our team about the markets, the economy and the lack of any real acknowledgement of the problems that have created the current economic conditions.   Over the next few weeks, we will jump into this discussion with our readers.  Here are a few items that we feel need attention from Washington and the pub

Well, we've been waiting for something from the FED.   With the decision to raise the rate it charges banks to borrow money, one can assume it may leave the FED funds alone for now.  With high umemployment, the FED has been cautious about attempting to slow growth.  However, inflation is present, despite the Government's attempt to portray a modest rise when food and energy are excluded.  Uh.  .  . that's what affects the consumer more than anything.  Energy costs are up 3.6% in the past 60 days.  That's hard to ignore.

January was going so well, with back-to-back good weeks in the market.  Then it turned.  .  .  Markets falling & Snow falling.  .  .Most of us said so-long to January with double-digit snowfalls.  The final weekend of the month consisted of shoveling and tv watching.  Even the Pres took in some hoops as he attended the G'Town victory of Duke.  The Bulls must have seen the weather forecast as they went into hiding a couple weeks ago.  The S&P finished January down 3.7%.   So much for a re-appointment of Bernanke helping the

The S&P finished 2009 up around 20%.  After losing 40% in 2008, up 20 sure feels a lot better.  Of course, another + 20 won't get us back to even, it just brightens our attitude when we look at how the 401k has recovered or the 529 account gained back a few bucks. 

As the Senate enters debate to confirm FED chairman Ben Bernanke, I wonder if 4 more years of "Gentle" Ben are what we, or the economy, or the Dollar, really needs. He's ignored nearly every inflationary signal the economy has provided, not the least of which is the price of gold. Other commodities are rising in price as well. The PPI reportedly jumped 1.8% in November. The rally in the market is courtesy of 0% interest rates and coming inflation. The gradual rise in rates needs to start sooner than later.

Expect more volatility as the traders return from their summer siestas and begin to quesiton how sustainable this rally really is. The S&P is up 12% YTD after being down over 20%+ in mid March. We're about to re-live the anniversary of the demise of Lehman and the panoply of corporate imcompetence which followed. AIG, Wachovia, WAMU, oh, I know, you remember. Do you think Hank Paulson misses his job? The economy can't make a long-term recovery with unemployment rising. September is traditionally one of the worst months of the year.