But each time we think the market has gone as low as it will, it lurches again, pitching itself ever downward. There is no volume to speak of, as the investors who already got out safely are waiting for a signal that a return is warranted. Unfortunately, we may not see that signal until after Labor Day, as Alan Greenspan, captain of the Federal Reserve Board, continues his Ahab-like quest to spear the great whale Inflation by pushing interest rates ever upward. Rates were widely expected to increase 25 basis points late last month as of this writing, and there is talk of another review in late August. The Fed says that five straight years of double-digit returns in the stock market have fueled a tremendous rise in spending by consumers, who now have more disposable income than ever before.
Unemployment is low.
Incomes are up. Investors are making tons of money. Businesses are manufacturing, borrowing and growing. The economy is firing on all cylinders. But the Fed says this is no good.