Wall Street in Flip-Flops...Again

I have written before that I sometimes find the folks on Wall Street to be a comedy of sorts. Today I have this same sentiment based on the news on the Street that today ended a four-day rally because, of all things, the folks on Wall Street were frazzled that just maybe the economy is weaker than they thought.

Just yesterday the DOW rallied triple digits on the news that Larry Summers would not be in contention to be the replacement for current Fed Chairman Ben Bernanke. Instead it looks more likely that Janet Yallen will replace him. If Larry Summers would have been the top successor he would likely have decided to taper the bond buying program currently in place by the Fed. Janet Yallen, however, is more likely to continue it.

To the folks on Wall Street this came as a relief yesterday. Thus the rally.

But, and I have said this before, tapering would in fact be a stronger economic development than not tapering. So what's the surprise on the street that the economy is not as strong as anyone thought?

One word. Duh. That is why quantitative easing is currently the position of the Fed. It is because the belief is by the Fed that the economy needs to be artificially propped up. It needs to be stimulated by low interest rates, and the bond buying program helps to accomplish that.

Perhaps I am missing something, but my take is that tapering should actually have the effect on the markets, that quantitative easing continuing seems to have had originally. The markets, and their underlying businesses would have a much better shot at gains and growth if more Americans are working, more Americans are spending, and when consumer confidence shows signs of improving. All of these things are lacking, thus the Fed continues to see quantitative easing as a means to hold things up in the interim. That is inherently a sign that the economy is weaker.

Still, I don't think today's move really means much. I just felt an urge to state the comedy of it. Yesterday the Street jumped for joy that the economy was crappy enough to warrant continuing easing. Today they sold off because they felt the economy was the obvious same level of crappy enough it was yesterday to hurt their investments.

It just leaves me scratching my head is all.