Editor's note: This column, which reflects market activity from the day before, originally appeared June 25 on RealMoney.com. To sign up for RealMoney, where you can read Bill Fleckenstein's commentary every day, please click here for a free trial.

DeVoe's Divine Satire: In honor of the hoopla surrounding this extra-special Fed meeting, I thought I'd do today's Rap a little differently. To kick it off, I'd like to share a tongue-in-cheek proclamation hatched by Ray DeVoe, who writes The DeVoe Report. For those of you who don't know, Ray has been a brilliant, eloquent analyst/market observer for better than 30 years. He penned "'The Maestro' and Associates Issue a Proclamation" two weeks ago, and now, without further ado, here it is:

"Since I, 'The Maestro,' and My Associates Have Tacitly Promised to Not Raise Interest Rates for an Indefinite Period to Prevent Deflation, Permission Has Been Granted for All to --
Speculate (Stocks, Bonds, Houses, Commodities ... Whatever)
Arbitrage Interest Rate Spreads
Reach, or Rather Grope Wildly, for Yield
Refinance Mortgages
Refinance Mortgages with Maximum Cash-Outs
Indulge in an Orgy of Consumption
Buy and Spend Before Prices Rise
Devalue the Dollar, Competitively
Balloon the Budget Deficit
Maximize Leverage

"These Actions Are Not Only Permitted but Encouraged, Until Suitable Price Stability or Satisfactory Reflation (Whatever Those Are) Have Been Restored and Deflation Is No Longer a Threat. Any Messiness Associated with Essentially Free Money Will Be Dealt with at Some Future Point. My Associates and I Pledge to Implement Unorthodox and Unconventional Procedures to Attain Our Objectives." -- The Maestro"

Joanie Christens the S.S. 'SOS!': The Maestro et al. was also the subject of a bit of humor this morning from Joanie, a friend who watches the markets very closely. She conjured such a priceless vision of the Fed and our current environment that I had to share this with readers as well:

"There is a tsunami brewing. Those in the dinghy the Fed are arguing over whether to row single- or double-time to get away from it. The only agreement they have made so far is that they want to continue to row indefinitely. Yet any reasonable individual can see that their attempts are futile -- comical, almost. The disturbing part of the scene is that this is extreme sport. Clearly, those yahoos are no match for the tsunami, and ultimately the crew is gonna sink the boat. So 25 or 50 doesn't really get me too revved up, as they might just as well be using Q-tips instead of oars." Picture the waves in the movie The Perfect Storm, as Alan and crew paddle furiously with Q-tips...

Index Close Change
Dow 9011.53 -98.32
S&P 500 975.31 -8.14
Nasdaq Composite 1602.63 -2.98
Nasdaq 100 1188.33 -3.37
Russell 2000 443.21 +2.32
Semiconductor Index (SOX) 354.01 -1.71
Bank Index 858.55 -3.62
Amex Gold Bugs Index 147.17 +1.30
Dow Transports 2356.13 -32.98
Dow Utilities 250.50 -0.01
NYSE advance-decline +280 +77
Nikkei 225 8932.26 +13.00
10-year Treasury Bond 3.36% +0.096

Curtain Up, Bonds Down: Turning to the action, the market was basically up about 1% in the first couple hours, depending on the index you looked at. We then marked time heading into the FOMC meeting, when the boys at the Fed chose to disappoint the crowd with only a 25-basis-point cut. Yours truly was dead wrong in scripting the scenario, but it would appear that the bond market had a similar notion, as it was clocked for a buck and a half, after having been down almost two dollars at one point.

Obviously, if the fixed-income market declines, that will affect housing, which will affect the economy. The Fed's statement tried to imply that things were getting better, and it noted that risks were balanced: "The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarter are roughly equal." But at the end of the day, the addict needs more drugs, and if he doesn't get them, trouble ensues. I think that was the verdict from the bond market. At least today, that was the housing stocks' take on bond-market action, as those stocks were roughed up 4%, plus or minus, across the board, and in fact led the tape to the downside.

Taking a Hard Line on 'Soft Spots': Meanwhile, I find it interesting that the Fed appeared to be so sanguine, when in the last 24 hours, the news out of transportation companies such as CNF ( CNF) and FedEx ( FDX) has been less than heartening. And today we heard more bad news from a couple of state governments. According to a story in today's Trenton Times, the governor of New Jersey said there's a risk of a state shutdown if the legislature can't agree on a budget by the July 1 deadline. Also, the California comptroller was on the tape saying the state was ready to halt bill payments. So, there are a couple of good-sized states where things don't appear to be improving too rapidly.

Turning to other outside markets, gold and silver were up roughly 1%, but that action was meaningless, as the precious metals closed before the Fed "opened the envelope." The dollar had been quite weak across the board, but it bounced a bit after the Fed announcement. That said, the Canadian dollar ended up a full percent, with the euro up about 0.25%, and the yen down fractionally.

Policymakers, Heartbreakers: Well, now that we're through the rate cut, it seems to me that the market will hold its breath for (a) quarter's end, to see if the boys and girls want to paint the tape, and (b) the next rate cut. I cannot understand why the Fed, after having embarked on the mission of stoking the stock/bond market, didn't give them what they wanted, in the form of 50 basis points. But then again, it's the same group of lunatics that got us into this mess in the first place.

Mind you, I'm not disappointed that the Fed only cut 25. I am just somewhat surprised that they veered from the script they'd appeared to have set -- especially after all the hot air they've expended warning about the risks of "deflation." Obviously, Greenspan has raised the bar for himself, in terms of having to deliver on the economy. But then again, that had already been the case, whether folks wanted to come out and admit it or not.

Bill's Fleckisms
What is Market Rap

Emerging-Market News: Meanwhile, turning back to the market's response, I don't put much "stock" in the market's action after an FOMC meeting. We've seen too many times in the past where whatever happened that day just turned out to be noise, and the real near-term direction only unfolded in the ensuing trading sessions. My suggestion is that we take all the market's action today with a little grain of salt and see what develops. I believe that the action in the next two days to a week and change will be very interesting in all the markets, and I intend to be on red alert.

William Fleckenstein is the president of Fleckenstein Capital, which manages a hedge fund based in Seattle. Outside contributing columnists for TheStreet.com and RealMoney, including Mr. Fleckenstein, may, from time to time, write about securities in which they have a position. In such cases, appropriate disclosure is made. At time of publication, Fleckenstein Capital had no positions in stocks mentioned, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy, sell or hold any security. The views and opinions expressed in Mr. Fleckenstein's columns are his own and not necessarily those of TheStreet.com. While Mr. Fleckenstein cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to bfleckenstein@thestreet.com.

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