The loss of a Wall Street legend/Why does the Fed ignore markets?/Other

My heart breaks with the loss of Art Cashin, both a good friend and an irreplaceable market participant and source for so many of us. His daily writings were always a must read and his personal friendship was something I always treasured as it was not every day when a legend was your friend. The one story I’ll give was his sole use of cash whenever we had dinner together, the countless memorable times. It was typically in a group setting, whether small or large, and he would first request an early start but would usually leave early, leaving me with either one or two crisp $100 bills to cover his cost of dinner. As it was always too much, I would keep the balance in my wallet and thus be his temporary bank, unfortunately without interest, with whatever was left over. The next time we would have dinner, I would make sure to give him his ‘withdrawal’ which he would then apply to that dinner’s bill. Art, as I know you’re reading my comments today from wherever you are now, as you always did and I thank you, I will miss you very much, both personally and professionally.

On to the Fed and I must say the focus of their analysis on whether to cut rates again in December and thereafter is becoming very myopic by their dismissive attitude towards markets and their holy grail view of restrictiveness and narrow focus of it. What is the stock market measuring anyway? Is it a reflection of the market’s view of the present value of future cash flows with a discount rate used? An earnings forecast with a P/E multiple slapped on? Is it just a casino? Is it just some random reflection of emotions with no regards to underlying fundamentals? I want to believe it is mainly the first choice but why would Fed Governor Waller say yesterday in a prepared speech, “I believe the evidence is strong that policy continues to be significantly restrictive and that cutting again will only mean that we aren’t pressing on the brake pedal quite as hard.” Evidence strong? Significantly restrictive? Governor Waller, please be specific, what exactly is being restricted and significantly? Are credit spreads at near record tights and stock market multiples near record highs sending any message that might be worth listening to about the economic and earnings outlook? Yes, the cost of capital is high for many, whether for business or households or anyone in commercial real estate but how do you square this with financial conditions?