Mr. Market loves today's ugly news.

At least so far.

Its schadenfreude with a cherry on top!

Joblessness at 10.2%, California functionally BK, 74% of S&P revenues coming in lower than last year, consumer confidence taking a real hit along with their spending.

Meanwhile the media targets zombies repeating that the economy is getting better and better, and a few buy it.

But what is the real story here?

Why the Fed of course, and the Carry Trade backed by the full faith and credit of the US of A!

Big banks -- the ones immunized against failure -- can borrow money at almost nothing!

Borrow a million at 0.025% a year. That will cost you the grand sum of $2,500 for a year. Now, let's say you buy a corporate bond yielding 7%. You've earned $70,000. But you have interest expenses of $2,500. That gives you a net profit of $67,500 for doing basically nothing. Borrow a billion, and you've just made $67.5 million.

Now take that money and do the same thing but shorting the dollar and buying better currencies and you're into BIG money.

Now take that money and bet heavily on stocks, and BTW, you don't need fundamentals, they suck -- momentum is the game!

And if it goes bad? Well you're back stopped by Uncle Sam.

Meanwhile, in the REAL economy, small businesses cannot borrow money -- that would be too much risk for big banks to take on, since small businesses can and do fail in a horrible
economy.

And the consumer?

They can borrow at 30% on their credit cards, so they don't need the money.

So THIS is what's REALLY going on.

And the worse the news, the better for the big banks, because that simply means the Fed will continue to keep rates at the bottom for a very long, long time.

And out of the other side of their mouth, they'll say how much better the economy is getting.