Where's the euphoria?

Are the markets finally coming to their senses this morning?

Maybe it's the fact that word of the latest Friday Night Rescue by the Fed and the Treasury leaked on a Thursday.  But for once, the reaction is not euphoria.  The dollar is actually down a bit.  Gold is actually rebounding and Marketwatch has a story that suggests gold has hit bottom.  Among the analysts quoted are our own Ed Bugos:

The government's move [to rescue Fannie and Freddie] is bearish to gold in the short term but bullish in the long term, said Ed Bugos, editor of Gold & Options Trader, a newsletter published by Agora Financial.
"In the short term it reduces the dollar's risk premium and boosts the debt markets," said Bugos. "In the long term, it confirms the arguments gold bugs have been making about a government that creates crises through intervention then adds more regulation and intervention in the next crisis."

Ed's thesis that intervention begets intervention is borne out by a front-page piece in the Wall Street Journal that flails about trying to make sense of the nonsensical.

The Federal Reserve has already slashed interest rates to counteract a deepening credit freeze and instituted its broadest expansion of lending facilities since the Great Depression to keep financial markets functioning. Over the weekend, the nation's two main mortgage finance firms — Fannie Mae and Freddie Mac — were placed under government control.

Federal officials and market players are struggling with the same issues: Why haven't the steps taken so far calmed the system? What can policy makers do next? Should the U.S. government let a big institution fail rather than stage another potentially costly bailout?

Hardly the sort of zeitgeist that drove up the Dow 300 points Monday after the Fannie/Freddie takeover.

And yet, the rout in energy and precious metals might not be over.  The Saudi Arabians are bucking OPEC production targets, at least for now, in what looks like a parting gift to Team Bush aimed at keeping oil hovering around $100 through Election Day.  Really, if this were a couple of months ago, and Hurricane Ike were bearing down on Houston, we'd see oil spiking $10.  As it is, $1.50.