Gold

It’s easy to think of today’s scorching-hot meltdown in equities, precious metals, oil and a majority of agricultural commodities, bond yields and the U.S. dollar as cyclical, corrective or somehow coincidental.

It has been by any reckoning a very erratic week in most markets. Equities, precious metals, bond yields, and oil were whipped here and there, up and down after last week’s FOMC vote.

Later this afternoon, Janet Yellen must fulfill her role as “Soother-in-Chief” of the world economy. Can she accomplish that without compromising her role as “Truth-Teller-In-Chief?” It will be a tightrope walk.

Since the middle end of August, lethargy seems to have haunted almost every market you can name. (In general, many industrial and agricultural commodities are down considerably, however.) But let’s look at some major areas to get a feel for what’s happening overall.

We’d like to begin with Volkswagen’s suicidal attempt to skirt pollution sensors and controls on their automobiles, essentially creating a fraud that at some point may lead to criminal charges. That drove VW’s stock down almost 17% on the day and hammered other automotive stocks.

Investors’ eyes and ears are turning toward the actual functioning of markets, even as we hear continual proclamations from various Federal Reserve members regarding a rate liftoff.

Crude oil is a good example of how the focus has been re-oriented.

In case we didn’t have enough of the truth-or-consequences scenario that has been catapulted into markets since the Federal Reserve decided yesterday to stand pat on rates, we now have the right wing in the U.S. Congress again troubling its own house. (And everyone’s house with it.)

The statement issued by the Federal Open Market Committee touched upon a small handful of reasons it voted to hold rates steady. We highlight some of them below in bold.

Tomorrow, should Chairwoman Janet Yellen and the rest of the voting members on the Federal Open Market Committee ignite lift off on the first rate hike since 2006, a majority of analysts believe a reactionary stock selloff would follow.

What we’d like to say today is, “Relax. Don’t worry. Be happy.” That is, when it comes to thinking about the Federal Reserve and the start of its September FOMC meeting.

We’d like to say, “Follow the data,” except you’d tear yourself in two, given how contradictory the data points have been (forever, it seems like). Just today, consumer spending was up, but not as much as predicted.