Art Linkletter, a gentleman who was way ahead of his time, would revel in today's seemingly insatiable appetite for both "reality TV" and the stock market. Linkletter is best known for a very popular show back in the days when tuning in to color TV meant sticking a sheet of plastic (blue on top and green on the bottom, of course) over your Dumont or Philco. His show, Kids Say the Darndest Things, was also the title of one of his many books , one of the best selling in American publishing history. Bear with me (no pun intended), I'll get to the point.

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Why ratings-craving TV execs or major publishing houses haven't hit upon the idea of melding hapless and often very funny comments with the intense interest in America's national pastime is presumably a function of age. The folks running the show are simply too young and primarily interested in pandering to the young and restless. Naturally, the prototypical show or book would be called Economists Say the Darndest Things. However, there's more than enough fodder for the same template to be used with strategists, equity analysts and central bankers on the Street of Dreams.

Economists are known to construct elaborate mathematical models in order to make educated guesses about how less than perfectly logical humans will react to ever-changing market forces. (I suspect they'd be much more accurate on Vulcan and would look mighty keen with pointy ears.) Fine-tuning inputs and adjusting models is how most dismal scientists spend a great deal of their working lives. Yet, it seems that the inability to forecast almost anything of importance accurately or even to explain what's already happened calls into question why so much attention is focused on their increasingly voluble musings. (To be fair, the same can be said about many other Wall Street mouthpieces whose forecasts are unchanged whether the economy is booming or struggling, and who rush to downgrade stocks or sectors after they've been thoroughly nuked.)

Greenspan in a Box

On the one hand, attention must be paid to our once-revered Fed head. Alan Greenspan has virtually unchecked power to dictate short-term rates and has the ear of the politicos in Washington. (Much to the chagrin of New Paradigmers, he's also proved to be far from irrelevant. And now he's being blamed for all of the economy's real or perceived, current and potential woes for the wrong reasons, in my opinion.) Rarely are investors or Wall Street economists heard to decry the Fed's easy money policy since the mid-'90s and now again in place. And few complained about its dismal record in forecasting the so-called New Economy -- as long as securities prices were rising.

Having viewed inflation as a greater risk to the economy than slower growth little more than three months ago, Mr. G and his merry band came to the conclusion that risk of a recession was greater only a month later. An aggressive 50 basis-point intermeeting rate cut a couple of weeks after that reassessment was then followed by another 50 basis-point easing less than two weeks later. "Front-loading" rate cuts helped to show a marked improvement in January, according to the Fed head. Yet consumer and business confidence continued to plunge, as did the Nasdaq Composite Index.

Now Mr. G finds himself in a self-constructed box -- enough so that he feels obligated to deliver a modified version of his Senate testimony to the House Wednesday morning. Will investors, including those domiciled overseas, come to view the Fed's economic micromanaging as something other than a positive? I believe that's a significant risk, especially when one recognizes that they've got as little or less "visibility" than Cisco CEO John Chambers. Flooding the system with liquidity isn't as likely to stimulate demand as much as it did when consumers and investors bought into the New Economy nonsense, which led to malinvestment, an immense increase in debt and a market bubble.

Do I hear 99.44%? Most recently, speculation about when the Fed will ease has become the stock market's obsession. Ex-Fed official and Bear Stearns economist Wayne Angell has drawn quite a bit of attention by outdoing his own estimations, bringing to the fore a game being raucously played by speculators across all markets. Having upped the odds of an intermeeting cut from 40% to 60% last Friday, he was back again Monday to up the ante to 80%. Still, he's lagging behind my estimate that a rate cut is 99% certain. While I'm no economist, I'd be happy to appear with Angell on the first episode of Economists Say the Darndest Things.

Consumer confidence, which will be reported by the Conference Board Tuesday morning, is apt to decline again, and durable goods orders are also likely to continue to swoon. You have to wonder if Mr. G already has an inkling that Thursday's National Association of Purchasing Management report might not show the modest increase that economists expect. It's almost certain that he'll have a good idea about that when he gives his revised testimony Wednesday morning.

There's a good chance that the economic data might provide the cover the Fed head would like to lower rates, so as not to be seen as targeting the stock market. But more aggressive Fed action appears to be the last best chance to stabilize consumer confidence, as the dismal outlook painted by so many companies has probably increased concerns about job security. The seemingly omnipotent economist understands that he's walking a tightrope without a net after his easy money policy led to an asset bubble that he claimed couldn't be viewed as such until it burst. And it has.

Warnings and More Economic Data

That the market continued to rebound after last Thursday and Friday's afternoon rebounds was no surprise. However, I was taken aback by the sluggishness in the tech sector until the "Insana Hour," considering how well the broader market traded throughout the session after an early pullback. The impact of Texas Instruments' (TXN:NYSE - news - boards) warning was such that the stock actually opened higher, but the Philadelphia Stock Exchange Semiconductor Index, or SOX, took a header nonetheless until it too bounced nicely in the afternoon.

Even with Procter & Gamble (PG:NYSE - news - boards) serving as a giant anchor after its latest warning (Turkey? Was it really Turkey?), the Dow still posted an impressive 200-point, or 1.9%, advance. Cyclicals were strong across the board. The Nasdaq Composite's late move pushed it higher by 46, or 2%, and the S&P 500 ended the day up 22, or 1.8%. New York Stock Exchange breadth was positive by almost 5 to 2 and by almost 2 to 1 on the Nasdaq.

After initial sluggishness, financial stocks heated up later in the day on further optimism that the Fed will move before March 20, and there was a nice bounce in bondland. Biotech and Internet stocks were among the day's best performers, as many of the old New Economy tech stocks lagged. Mining stocks also continued to rally even with the dollar firm. Retailers were also strong after Lowe's (LOW:NYSE - news - boards) met expectations and stated that the second half should show marked improvement on higher gross margins. (It's a gutsy call given the recent downward revisions to GDP estimates.)

I continue to believe that we'll see further near-term strength and that tech stocks will be among the biggest beneficiaries of a potential or actual intermeeting rate cut. However, I'm still cool on the semi complex, since inventories and excess capacity will be a drag for some time to come. The near-term upside target on the Comp is the 2535 area and 2350 on the March Nasdaq 100 contract. That move should provide an opportunity for investors to do some portfolio fine-tuning by becoming more defensive and value-oriented. Traders are advised to take profits as they come or to use rolling stops.