Monthly Fed Press Release

DJIA

open 10,753.39

close 10,761.03 up 7.41

day high 10,833.39

day low 10,717.74

today's volume 186,650,987

3mo avg. daily volume 197,542,367

DJTA

open 4,475.95

close 4,511.27 up 36.15

day high 4,540.46

day low 4,473.94

today's volume 16,591,000

3mo avg. daily volume 17,382,502

We had about a 1:2 up:down day today, although markets closed marginally higher when all was said and done.  Although a run up today prior to the Fed announcements, the markets corrected back down just in time to close.  I'd like to share proof that stock prices have nothing to do with company values any more.  Granted, looking at the P/E Ratio's of any company will make one wonder why one should buy a share of something that will take on average 15 years of added earnings to match the current price should be enough of a hint that Wall Street is in the whorish business of sales, not wealth creation, preservation, or proper investment.  However, further those sentiments with rising markets over the past week in anticipation of the Fed's Press Release issued today.  Below are excerpts I grabbed from the Fed Reserve website, the full release can be found by clicking HERE.  I read a lot of these, and this one is the best I've read in a while watching the spin doctors do all they could to make it sound as positive as possible.  For those of you with a much stronger understanding of proper literary devices than I, please enjoy your nervous chuckle as much as I did.

Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.

My favorite line is one I did not put to bold font at the end, "The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability."  Unless my English is off, that means that in a hypothetical context of price stability, we would see a return to higher levels of resource utilization.  Meaning two very obvious things to me... a) we're probably not going to have long-term price stability which means b) we're not going to have better resource utilization.  So my concern about the stock market seems justified, in that how can you buy a company that produces resources, when there's no where for those resources to go.  It's the age-old argument from the Keyensian Monetary Theorists, that if you smash a window at a Bakery, the Baker has to buy a new window, which puts people to work.  But from the Austrian School, the counter argument is sure, but you're fixing unnecessary problems and those funds could have been put to better use elsewhere.

The question I get all day long is, "when are the markets, especially the Gold markets, going to correct?  Now thankfully people are asking for the right reasons, the desire to increase exposure at cheaper prices.  Below is a chart courtesy of Jim Sinclair's site.  Since we have not seen a short-term correction in the price of Gold, the opportunity may present itself to increase a position... however, with each day the rise continues, so does the support line.