Wall Street's rationales for investing are eclipsed only by the spin of political correctness that has portrayed everything as being better, if not great. Even the FOMC Statement today gave hints of imbalances that the Fed either doesn't understand, dares not describe, or would simply negate the public reasons for hiking rates. We felt this is what they would do even though, after the recovery cycle had peaked last summer, it was of course too late and would thus backfire.

So they left it to the uncertain category that leaves lots to the eyes of beholders (read it dovish or hawkish, as one wishes). Candidly the markets were turning back south; so was the economy; well before the Fed's move on rates. Recall our view of the S&P topping in the spring; dropping back; reviving into summer with an ideal early-mid July top; and then sagging, with a plunge into the abyss sort of delayed until the technical algorithms forced selling later on.

We discuss the FOMC a bit in the 2nd video; but it matters since the perception among most pundits is that all would be good if the Fed had only reversed their policy. No; and that's the point of the market topping before the July economic peak (roughly); as well as the coincident tracking of a new recessionary phase back to that approximate time as well (something else I've contended based on factual charts not interest rate moves taken alone). That means that even if the Fed has cut rates, and you got another rally, it would be unsustainable, as the problems permeating the economic scene now have far greater substance than a mere Fed adjustment can easily address.

We have several new readers I'd refer to the summaries below for a glimpse of the flow of the overall pattern, which was expected to be interrupted by focus on earnings - whether Boeing (BA) or Apple (AAPL), both of which we thought would be soft for reasons mentioned, or spurred by excitement over Facebook (FB) doing well). In the grand scheme of things; none of this is the overarching concern.

As I'm running a bit late tonight (and everything is going as outlined including a late fade); let me point you mostly to the videos below; but also outline a couple types of issues that I hinted at in my opening remarks:

One of those of course is 'Ducking Donald' as some are calling Donald Trump's decision (so far) not to debate tomorrow. The backfire there could be alternative support for Wounded Warriors days after CBS News contended (via a whistle blower) that they under-fund the actual veteran assistance issues. Pretty brave of CBS if it's true; and they had to clarify with an accountant today which seems to be a effort to deflect blow-back.

My point on Trump relates to political correctness too. His support (not humility) is probably centered on not just populist views; but the opposition constantly (it reminds me of the Fed's rationale given for hiking rates) contends all is great; as it is not for most Americans. CNN aired several college kids for Trump; and that moved me, not to endorse anyone; but to understand how tough kids see things and how well they actually grasp what Government promised but hasn't delivered. To contend we can't do a lot better is disingenuous. Even the kids did know (I was proud to hear that) how poorly both parties handled trade deals in relation to China or other countries for many years; letting our Nation decay.

So I think it's really the message, not Trump, that's resonating. While it's the opposite from Sanders; it's really a different perspective on the same message. It's also one (both sides) that suggests not a great year for the establishment that tries convincing voters that everything can work in the existing framework. For a market perspective; that ties into something very macro but meaningful from more than a short-term perspective: the idea of 'peak Debt'(can do what they did to kick-the-can down-the-road any more; and that's already been evident).

There's more; check below:

Daily action - I learned late today that China decided to prosecute the manager of their economic statistics bureau, or whatever it's named. Beijing knows that data is massaged to say the least; now they want to blame one guy? Why? For sure they'll come up with some corruption allegation (as if he recommended oh 500 too many steel mills or ghost buildings) designed to feign responsibility for anything away from the central committee of the Communist Party. Last week a lot of folks laughed in Davos, when IMF Director Christine Legarde said that: 'China has a communications issue'. That's the understatement of the year perhaps. And perhaps Beijing listened as it arrests (without clarification) 'the communicator'.

Again we'll see the problems with a planned economy, but we also see pitfalls here, where all that was planned was the lifting of financial assets, 'as if' major manufacturing sectors had not essentially been dismantled or shipped abroad. It is the lack of mainstream truth-telling about what happened, and so few solid investigational journalism stories about anything candid or of global importance that pushes voters (the young don't have the allegiances of older folks and very willingly will see-through the political facades) toward the polar opposites.