Market Talk

- The Fed is often accused of being behind the curve, and for good reason. Look at this headline that ran earlier on the broadtape, quoting Dallas Fed’s Richard Fisher:

*DJ Fisher: Sees Early Signs Of Unconstructive Market Speculation

Early signs? Take a look at a chart of any commodity or major stock index. Early signs of unconstructive speculation? And this comes from a guy who’s considered to be one of the FOMC’s biggest hawks. Good heavens. Here’s his quote, reported by Newswires’ Frances Robinson in Brussels:

“We have abundant liquidity, now there’s excess liquidity, which is working through the system,” Fisher said. “There are in my view, early signs of speculative activity that I don’t consider constructive.”

If he’s only seeing “early signs,” how far behind the curve do you think the rest of the Fed gang is? By the way, Fisher quipped that protectionism is “the syphilis of economics.” Interesting analogy. What’s the gonorrhea of economics? Probably speculation. It’s bad, but you can get rid of it pretty quickly.

Meanwhile, Philly Fed’s Plosser is dishing up some hawkish comments, saying headline inflation is “all that matters,” and core is just for filtering noise. The frank talk is welcome, but stock market ignores him because his hawkish tendencies are well know.

- US stock markets seemed to find euro strength a source of comfort yesterday, and have frolicked with the single currency again today. But euro’s lost some zest in early afternoon trading and is catching some notice from stocks, which have since pulled back from their earlier highs.

As is often the drill, IBM and CAT together account for roughly 40% of the DJIA’s advance, at this point up 70.

- Now to the absurd file. JPMorgan strategist Thomas Lee takes the cake today for the headline on his morning US equity strategy note: “History showing post-nuclear disaster bounce is 9.6% for the next 3-mos plus negative investor sentiment point to upward bias in next few weeks.”

We kid you not. That’s what he wrote. After nuclear disasters, stocks usually bounce about 10% in the next three months. Uh, yes, sample size is a little small, so be careful taking this one to the bank, citizens.

Question for Mr. Lee: What are the returns for stocks three months after two regimes are deposed in North Africa, another nation erupts in civil war, a third European nation collapses financially and needs a bailout, and the world’s third-largest economy gets hit with a 9.0 earthquake, followed by a tsunami, followed by a nuclear crisis?

(Paul Vigna contributed to this post.)

In case you missed it, here’s the late morning News Hub extra from WSJ.com, featuring an interview with nuclear physicist Kirby Kemper, and a break-down of the pressures on the market as Japan’s nuclear crisis grows.

I wonder how many more times in my life I’m going to have to say, “that’s the worst thing I’ve ever seen.”

“The time to look for the emergency aisles and where the exits are located is before takeoff, not after the wings fall off the plane,” Barry Ritholtz writes this morning at The Big Picture. He points to a Doug Kass list of calamities over just the past ten years, like the Sept. 11 attacks, Katrina, Haiti’s earthquake, and notes that these so-called “black swan” events occur much more often than we think, and it’s only common sense to be prepared for them.

But have we ever had so many all at once? The Japanese are suffering through three distinct disasters at the same time, the earthquake, tsunami and nuclear crisis. It is going to take them God only knows how long to get back to where they were Thursday, and anybody who blithely suggests the rebuilding will be a good thing because it will spur economic activity isn’t really watching what’s going on, and has a poor grasp of economics.

I don’t know about you, but to me, it feels like the world’s on fire these days.

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