HEADWINDS

The Fed has painted itself into a corner, not an unusual occurrence for such bureaucrats. While 2015 was in Fed lore one of hesitation, indecision, a fact that on its own negatively effected investor confidence, given the recent China blowup, the Fed now faces a real problem: do we or don't we and if so how many times. We're talking interest rate hikes here, the dot plot or any others you prefer.

Any forced rollback in rates or rolling out another round of QE would most likely destroy whatever inkling of credibility this Fed has left. Yes, it's nice for former FOMC member Richard Fisher to come out an admit they created a bubble all the while denying it. In the final analysis this is a committee and putting your faith in committees is right up there with kissing one of the Pardoner's sheep bones in Chaucer's Canerbury Tales. Good luck.

It's amazing what a bad week will do. As the WSJ noted today.

The Dow industrial tumbled more than 1,000 points this week, marking the worst first five days of any year, as volatility across the globe rattled investors.

Traders said they are bracing for further big swings in the weeks to come.

The Dow fell 1% Friday after starting the day in positive territory amid a strong U.S. jobs report and an uneventful session in China’s markets overnight. But shares slumped in afternoon trading as investors became unwilling to enter the weekend exposed to the risk of further losses.

In all, U.S. stocks lost $1.36 trillion in value this past week. The unusually severe drop highlighted the precarious position of markets caught between relatively high valuations—attributable in part to years of easy money from central banks—and a new round of uncertainty about the fundamental underpinnings of key parts of the global economy.

Now if this sounds like the recent Chinese stock market flame out only affected local Chinese investors, it don't rain in Indianapolis in the summer time and the world with all the political push and palaver about the benefits of globalization these past several years is not more interconnected than ever.

So the future is about headwinds. We know central bankers cause bubbles. With all the global turmoil notwithstanding those feel good government numbers about jobs does this so called recovery or any other need another headwind?