Uncertainty Rules The Waves

In the this shouldn't continue category, the markets will continue to slowly implode until all the players disclose all the material information regarding their exposure to the credit markets. Just as nature abhors a vacuum, the market hates uncertainty. Uncertainty creates illiquidity, illiquidity creates risk aversion, and risk aversion creates the slow slide to valuation oblivion. It is really as simple as that. The Fed can cut rates until the cows come home, but it won't make a difference until the investors regain confidence in the markets. The sad part is that the economy is in pretty good shape, and the equity (and credit) markets should really be doing better. It is really amazing to me that there are a disproportionate amount of analysts looking at the Treasury market and predicting where Fed Funds should be. Those days are over. Risk aversion has push Treasury rates to unrealistically low levels, and the market watchers dip into their old playbook to have something to talk about. It can't be reiterated too many times: disclose and take your lumps. Let's all move forward.