``All this suggests that there simply isn’t any real improvement at the base of the economy. Mortgage rates have backed up along with the Treasury market and the Federal Reserve clearly is unwilling to buy mortgages indefinitely to support the market. The market for inflation hedges showed the Fed the instruments of torture. Along with asset prices, the bank rally has fizzled. Banks are doing nothing and have nowhere to go, which is why the implied volatility on bank options has fallen so far.''

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