After a 550 point decline in the DJIA in the last two days, this mornings opening was slightly better.  Global stock markets remained mixed.  The world is facing the possible end of central banks driving markets are now forced to adjust to the real underlying economic fundamentals. 

Now Markets and economists have to look at the economic outlook from the perspective of reduced stimulus. 

• Is employment increasing with new jobs that pay wages at levels that will improve 80% of wage earners?
• Will businesses continue to report solid earnings and profits as they have in recent quarters?
• When ObamaCare kicks in in 2014, what impact will it have on individuals and businesses?

Lots of questions with no significant answers at the moment. 

Presently markets are not thinking about any of it.  All market action in the last two weeks has been driven by reducing leverage and making decisions on the fly.

The Fed's track record on economic forecasting is no better than private forecasts, so while the monetary outlook for interest rates has become more bearish, the Fed's economic outlook will still have to proven to be correct.

We will have to give this a few months, but we still believe that the economy is not as fundamentally strong as what the Fed believes it to be.

-Michael Corboy