This market is broken

After hours we have earnings from CSCO - every penny CSCO goes up the SPUZ rally .25 - stupid.
CSCO is an important company but seriously is that where we are at? Zero liquidity....ZERO.
Moodys made some comments today alluding to the slight problem the US government faces fiscally - here is a snippet

The ratios of general government debt to GDP and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries.

If the current upward trend in government debt were to continue and become irreversible, the rating could come under downward pressure. The trend and the outlook would be more important than any particular level of debt


Are we just supposed to ignore stuff like this and focus in on if CSCO beats the numbers??? Apparently yes...

People are so used to problems just going away and things getting better well Im here to tell you when the shot of cocaine that the government shot in the arm of the economy goes away the withdrawl pains are going to be enormous. The guys at places like PIMCO are saying the right things - El Erian is screaming from the mountain top watch out there is still tremendous risk in the system...I for one believe him and agree. There was a guy on TV from Blackrock today saying multiples are cheap on stocks like IBM and INTC.....that may very well be true but go back to the Gretzky concept of go to where the puck is gonna be...the stock market is the ultimate discounter of future events - its telling us a couple things perhaps - multiples are going down as players realize we are in a steroidal environment and two perhaps earnings could once again fall off a cliff. honestly do we really believe that when places like California and Illinois are insolvent that we are in a world where one should be paying a big premium for future earnings that may or may not materialize?
Be extremely careful - I have opinions but obviously dont know whats gonna happen - I see sovereign CDS blowing out (Greece, Portugal, Dubai) - I read about states (like my own) that are basically insolvent, I read about tightening of lending in China, I read about higher taxes (yes they are coming), I read about an insane deficit at the government level - I read all this stuff but yet market talking heads act as if this is a normal environment - it aint.

JB