One Fed Head Finally Gets It

The market closed at its highs yesterday, and is getting another nice bounce this morning. I don't like to see too much strength, too early in the day, so it remains to be seen if this rally holds.

I have been railing against the Fed heads for not getting it. But this morning, Vice Chairman Kohn gave the futures a big boost by saying that the Fed must be "flexible and pragmatic" in setting policy. That was pretty much a green light endorsing further rate cuts, and the market took it to heart.

Financials are up a lot this morning, despite the news that FRE is cutting its dividend by 50%, and WFC is taking a $1.4 billion charge due to loan loss provisions on home equity loans.

On a positive note, comScore reported that Cyber Monday sales rose 21% to a record $733 million. I guess Christmas (and Hanukah) are still going to happen this year.

Asian markets were mixed overnight. I was a bit suprised they were up more. But the Yen is trading lower this morning, and that is helping. The volatility index (VIX) has also gapped down, another positive.

The 10-year yield has also bounced back from Monday's plunge, currently hovering near 3.99%. And oil is down again, below $92, and looking like it has peaked for the year.