Chaotic confusion in DC drives markets down

Stocks tried to extend their strong gains from 2 weeks ago into a 2nd up week. They did, but barley by eeking out a gain of 55 last week. That gain does not tell the full story. The Dow had a substantial gain of 330 by mid week when the Treasury announced its plan to buy bonds to drive rates lower. Then the house of cards crashed, brought on by chaos in DC.

Tax a handful of "bad guys" at AIG to reclaim $165M paid in bonuses AUTHORIZED BY CONGRESS became the top priority in Congress. The dunderheads refuse to admit their mistakes, instead blame & tax businessmen (& women). The $Bs & $Bs paid to overseas banks which do not employ American workers is being ignored. Plenty of other problems we don't understand involving $Bs are being ignored. All that Congress is worried about is covering its tracks. Stocks sold off in the 2nd half of the week & only the clock saved the Dow from more selling which would have dragged it into a loss for the week.


Dow Jones Industrials --- YTD




Today the administration is trying to put Humpty Dumpty back together again. It looks like their plan is to take away authority from the Federal Reserve given last year by Congress & give to the Treasury. More will be revealed this week. Barney Frank thinks that's a great idea which signals more controversy & chaos is coming.


•Obama to Outline Regulatory Changes Aimed at Preventing Repeat of Crisis

Obama advisers note populist tone, urge restraint- AP


The bungling by Congress is hurting all, most of all banks. The S&P 500 FINANCIALS INDEX bottomed at 81 on Mar 6 & only 12 days later rebounded to 126. In the last 2 day selloff, it's back under 110. That's what happens when Congress declares war on banks & less directly on Wall Street. Their focus is clear, watch the molehills, the mountains will take care of themselves. Attacks by DC is not getting banks to lend more. If anything, it will only make the credit crisis worse.


Meanwhile MLPs are holding in there or losing out, depending on your point of view. They are up this year, a rare story, but were not able to get back into the 190-200 trading zone which prevailed early this year. I have a feeling that glummer news announcements next month will take them lower. This week, REITs sold off but junk bond funds were up a little, probably helped by the very strong week for Treasury bonds.


Alerian MLP Index --- YTD





Sorry to drone on about the gov. But financial problems are enormous & Congress doesn't have a clue what to do other than cover their own tracks. As long as Congress makes war on financial businesses, stocks are going nowhere.