Index Close Change
Dow 8516.43 +25.07
S&P 500 923.42 +3.69
Nasdaq Composite 1489.87 -1.22
Nasdaq 100 1113.68 +0.83
Russell 2000 410.73 +1.70
Semiconductor Index (SOX) 337.57 -0.06
Bank Index 798.87 +4.72
Amex Gold Bugs Index 143.37 +2.58
Dow Transports 2356.39 -8.89
Dow Utilities 232.59 -0.50
NYSE advance-decline +660 +242
Nikkei 225 8018.51 -40.97
10-year Treasury Bond 3.39% +0.016

Editor's note: This column, which reflects market activity from the day before, originally appeared May 21 on To sign up for RealMoney, where you can read Bill Fleckenstein's commentary every day, please click here for a free trial.

The equity markets were soggy last night, and our stock-index futures were back and forth over unchanged, before turning red by the time the casino opened for business this morning. However, the futures bolted higher shortly after the opening when our incompetent Fed chairman commenced another round of jawboning on Capitol Hill. I parsed the speech and found nothing but cluelessness as usual. He opined that productivity was responsible for things not having been worse, and also chirped about oil prices.

Center-Hall Siphon King: Of course, he made sure to let everyone in on the big secret that the economy was doing better because folks were levering up and taking money out of their homes (though he acknowledged that so far, the economy has been sort of hesitant to respond to all the stimulus). He said, "These factors Fed easing measures , along with the ability of households to tap equity accrued in residential property, should continue to bolster consumer spending and the purchase of new homes." What I find rather ironic is that here he is, counseling people to pile on debt and go crazy in the housing market at the same time the Fed is talking about how scared it is of deflation. Somehow, those two things don't quite seem to jibe.

But what got the markets all jazzed were Greenspan's comments that the Fed could move out the curve in terms of monetization. That set off an explosion in the bond market, with the yield on the long bond touching 4.29%. Basically the Fed is saying, we'll just monetize every stinking dollar of debt the government has if we have to. Amazingly, fixed-income participants think that's a good thing. So, the incredible feeding frenzy to lock in lower yields continues unabated in this market. To the many readers I've heard from who are considering shorting fixed income, I would respond, be darned careful. When things get so wild, and financial assets trade this crazily, the risk/reward equation is stacked against you. I wouldn't want to own bonds, but I wouldn't advocate shorting them either, at least not unless you really, really know what you're doing.