Markets Give Fed Thumbs Down

      Lest there be any doubt at this point the verdict is a no on the Fed's decision to extend Operation Twist. They are not mollified and want more than this.   

      Going into Yesterday's FOMC meeting the market had expected the extension of OT and that's what they got. The market ended up flat yesterday and is down today.

      In addition the job claims were disappointing as were some manufacturing indexes.

      "Weekly jobless claims fell slightly but the four-week moving average rose to a 2012 high, while the Purchase Managers Index report from Markit said manufacturing grew at its slowest pace in 11 months as hiring slumped and demand waned. Finally, home sales fell in May though prices rose, casting doubts on a real estate rebound."

        http://www.cnbc.com/id/47903220

         "The Philadelphia Fed index, considered a strong barometer of demand, posted a weak reading of -16.6, indicating contraction"

         The markets simply want more:

          "Bad economic news kicked off the day and only got worse. That just exacerbated trader disappointment that the Federal Reserve, following its policy meeting Wednesday, had nothing more to offer the market than a continuation of its Operation Twist program of selling short-dated bonds and using the proceeds to buy longer-duration securities."

         "Some in the market expected more quantitative easing to help boost the flagging economy."

        "We're just not in a period of expansion now," said Andre Julian, CFO and senior market strategist at OWM Asset Management in Newport Beach, Calif. "A lot of people were looking for more from the Fed. A lot more was priced in. A lot of investors are expecting QE now."

        So much for the Goldilocks Economy. This economy is just wrong-the Fed always does that little bit less than what is needed. You only have so much time to put out the fire. At some point the house is burnt down and putting out the fire won't matter.