August 14 Market Action

We'll have a more detailed analysis later today. Suffice to say that when the dollar rallies, the markets correct--it has been the theme for some time. For now, this appears to be a correction only with no clear signs of major market stresses like we saw last year. That could change, but we believe the dollar will resume its downward movement soon.

In the meantime, here's an interesting discussion with Nassim Taleb and Nouriel Roubini. One great point that Taleb makes, we're in the habit now of rewarding failure. Cash for clunkers, money for bailouts, taxation, etc. When you reward failure, you can expect negative consequences over time. Keep your ears out for government programs that reward bad behavior. They're all around us and gaining support.