You could also argue the Federal Reserve is in the habit of perpetually lying to the American people. Of course, they will argue that it's for your own good. They are cheerleaders. If that's so, don't pay them and send them to the stock market to jump up and down at every opening. In the end, such lies lead Americans to the poorhouse by misallocating capital and losing lots of money when the economy turns down.

At which point, they will argue that it's the investors fault not theirs. After all, they did their best to create a bubble and keep pumping it to the point they can't help and must beg for QE ability at every economic downturn. They aren't just destroying our vibrancy and our wealth. They are destroying capitalism, and honesty and faith in the government. Their argument to that is they aren't part of the government which is a good point to realize. They also apparently have no rules preventing them from outright lying.

"Such is the unavoidable consequence of choosing to abrogate markets in favor of financial despotism." I couldn't have said it any more succinctly. I agree the Fed needs to raise rates so they have ammunition to lower and sadly, doing so at the end of the cycle is the worst time to do it. However, I also think they want to cause rates and inflation to rise and hold off on rate increases to as little as possible to enrich bankers making money off the bigger spreads.

Great overall synopsis and thanks for the news on Canada's slow but gradual turnaround.

Japan is going to be in a world of trouble and I think everyone knows it. Sadly, the bet has been to borrow in Yen at nothing and buy foreign assets with interest, however that is unwinding. Why, because people are realizing the game is changing rapidly to whoever owes money in Yen will be the losers as the Japanese government and central bank can't stimulate more without bankrupting the government and/or destroying the currency all together.

The author is right that inflation would force people to spend now rather than later, however, that puts pressure on the central government's horrendously huge debt which is still growing. There is no easy answers as they fall towards the black hole and have already hit critical velocity known as negative interest rates. Where things go from here is scary in that the US Federal Reserve is copying them starting with asset pumping and abnormally low rates to punish holders of capital. When the cental bank hates capitalism and wants to issue liquidity via QE run.

Yawn, like it ever was on the table to begin with. There is always an excuse and the constant reported revisions show up their statistics to mean little if anything when first reported. Yellen will only be forced to raise rates or maybe she's looking to raise after the crash to create the second half of a new great depression. She has already completed the first half of the scenario by allowing banks to gamble (which is partially not her fault because of the revocation of Glass Stegall but still she could do more to restrict them from bathing in derivatives exposure and making companies to back derivatives that will go bankrupt in a heartbeat), by easing money throughout the whole cycle to artificially pump up prices, and by pushing the Federal Reserve into a corner where it too is leveraged and gambling as well.

All she need do now is say, "Let the nightmare begin."

The biggest part of the report was the changes, or errors and corrections to previous reports showing that the reported numbers are a bunch of bull because, by their own admission, the error in their reports are so large their changes in the reported numbers are meaningless. It is quite easy for us to expect next month they will revise up the numbers and say everything was just a correction. Do not fall for their bad statistics. Only look at the corrected numbers months after they report them and even then, question them because clearly the margin for error is so huge I don't think their numbers should really be taken to mean much of anything.

"And even if the Fed stops tightening, capital markets and lending standards are tightening for them.", agreed the Fed is a follower not a leader. If lending tightens further or if inflation rises substantially the Fed will be forced to raise, however it will not be a shock, because it already will be in the market. People will be screaming at them as to why they didn't raise rates sooner.

Sadly, housing lending, as I mentioned over a year ago is getting as absurd as the last cycle as banks and government entities try to sucker those who can't buy houses to buy them with 3% down or less yet again and claim they are doing them a favor again, lol. In the meantime, to stimulate demand banks are supporting a gamete of real estate trusts that are getting people to buy up property synthetically so they can play games and create another class of losers since they can't get them to buy the bonds they got them to take massive losses on last downturn. Invent another vehicle and get passengers on, then roll them off the edge of a cliff again. Really? Owning the property is riskier than owning the high yield bonds folks. Wake up.

Agreed, the relief rally from the Federal Reserve indicated that we may wait another month before a rate hike rather than have one come up soon. And as all market participants know with the Federal Reserve these days that just means they have another month to justify moving to the next month or later yet again.

In reality, the only thing that will get them to move is the banks demanding it because they got suckers to buy all their gambling assets and want them back on the cheap or inflation rises so much they can't conceal it and rates move without them. Ergo, they will be behind the curve yet again if they aren't already.

I agree raising rates at the end of the cycle is horrible and is a great way to create a deep recession. After all, this pattern helped create the great depression as Yellen probably knows since she studied it in detail. Prolonged easy money rates followed by tightening was a major formenter of the great depression along with banks gambling without Glass Stegall to prevent them from gambling on stocks, real estate, and commodities rather than lending it to people. There is reason to worry here.

Sadly, the only thing that cares about the future of the US economy is a free market. While the Fed and politicians heap on the regulations, destroy Glass Stegall, overspend, overstimulate, and abuse interest rate policy to screw retirees and prevent it from aiding in the next decline to enrich themselves and prolong the cycle, the market is sending undeniable warning signs that this is reaching its limit rapidly.

It is true it usually takes an event to enter a downturn. Those events have already happened to the start of a global down cycle starting with materials and manufactured goods and moving into transportation like usual. The issue is what event will be the hallmark to a broader based decline which will impact the US which is already overstimulated by monetary supply and deficit spending? The issue is now will it happen, but when.

Real Estate REITs are yet another sign of an overvalued market and attempts to create artificial demand. Furthermore, like precious metals REITs it will be hawked to those who can't or shouldn't just own the underlying asset and exposes them to all the risk plus administrative fees.

Given the nuances of value in real estate, in a real estate downturn one should not assume these REITs will be able to continue dividend payouts, will be willing or able to disclose the value of the underlying asset they hold, or able to sell their relatively illiquid assets. In addition, doing any of these will incur even more costs on the dumb holders of these much hawked "financial tools" in which the buyers are often more the tools for the ones hawking them than anything else.

Until there is an expansion of growth rather than the opposite there is no reason for a major breakout in the trading range unless there is more loose money from the Federal Reserve or government. That said, I do not think anyone should want this. It will make the Federal Reserve have even less policy choices in a downturn and to keep markets up further it will demand more of the same as long as the market remains overly rich. If the government provides the stimulus it will be on an even wider unsustainable debt structure than we already have. Rising rates will already hurt the budget of the US government in the future.