In one of the biggest gap and crap plays I have seen for quite some...

In one of the biggest gap and crap plays I have seen for quite some time the market gapped up 2% on Wednesday, went into the red then closed slightly higher. Already there is speculation that the Fed Cash Proposal May Not Be Enough. BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? In one of the biggest gap and crap plays I have seen for quite some time the market gapped up 2% on Wednesday, went into the red then closed slightly higher. The plan may not matter much, said Richard Yamarone, chief economist at Argus Research in New York. 'It doesn't address the underlying problem here, which is trust,' Yamarone said. 'Banks don't want to lend to each other because they don't know what the counterparties own and, in all actuality, they don't even know what they own and they don't even know how to price it.' 'Between the coordinated agendas, discount window collateral changes, invisible hands, superfund conduits, sub-prime bailout plans and now, the biggest act of international economic cooperation since the 9/11 terrorist attacks, you can't help but wonder what the heck the Fed sees that the markets, 5% off their highs, have yet to price in?' Given that economists were almost unanimous in predicting a 25 basis point cut, why should there have been such a huge selloff? And then why the gap and crap with the latest Bernanke surprise party? Was no one really surprised? Was this a pretend surprise? Did everyone want a bigger surprise? Was everyone surprised at 8:30 but unsurprised an hour later? The only people who weren't disappointed but were surprised nonetheless were bond investors, who sent Treasuries soaring. Maybe all the disappointment was just a dose of reality creeping in. Investors are looking for the magic bullet that would make everything OK, encourage banks to lend (a lower rate would help), heal the wounds in the home-loan market, wipe away the accumulated debt of consumers and put the economy back on track. Alas, there is no such tool in the Fed's arsenal. That there is no magic wand Fed's arsenal should not be such a great revelation but perhaps it is. The number of people that have emailed me recently describing the Fed's ability and willingness to inflate forever and for the market to respond favorably to that stimulus is staggering. Maybe that realization that the Fed has no magic wand is what has everyone surprised here. And if you can't trust the grand wizard who can you trust? The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.