Chart Of The Day


It’s getting downright ugly out there as stocks are now collapsing 5% this session and are now off 17% in less than a month. The most interesting aspect of this whole collapse is that we’ve already wiped out all of the gains since QE2 officially started and we’re fast approaching the Jackson Hole levels when the program was first announced.

Apparently, Brian Sacks’ plan for keeping assets “higher than they otherwise would be” isn’t panning out so well.  The wealth effect has turned out to be nothing more than confidence fairy economics.   And now the scariest part is that, due to persistently misguided policies, the Federal Reserve appears to have completely destroyed their credibility with regards to future policy.

Figure 1 – Wealth Effect

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