Wall Street Greek: Today's Key Market News

On the day that hedge funds with a 45-day advance redemption notice face last minute requests from scared silly sophisticated investors, stock futures are down across the board. You see, for the super-wealthy, capital preservation is pretty darn important. First and foremost, before a penny of profit is earned, nobody wants to lose what they have. In this regard, Benjamin Graham had investor psychology nailed, as he sought a margin of safety in any investment consideration. Warren Buffet brought greater light to this investment theology, with his tried and true success over recent decades. We expect that over the coming weeks, news of failing hedge funds will flood the wires. At the same time, these funds will continue pressured to exit their positions, driving shorted bad names higher and owned favored names lower despite intrinsic value, or perceived value.

So, the market could care less right now about July's Consumer Price Index, which was reported this morning about in line with expectations. Headline CPI rose 0.1% in July, while the core figure, which excludes changes in food and energy, increased 0.2%. Core CPI matched June's increase, and was up 2.2% over the year ago level. This is not the kind of number to push the Fed in either direction, but it certainly doesn't show an inflation rate that is headed in the wrong direction. We suspect that as the Fed starts to see Main Street falling apart, it will get it, but it may be too late to stave off recession at that point.

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