More on Tapering

From widely read blogger Bill McBride, 27 minutes ago:

"My view is the Fed will be data driven - as opposed to calendar driven - and will only taper in December if there is a clear pickup in the economy during the 2nd half."
Before coming to this conclusion, which we posted earlier, he raises a notion put forward by others that Chairman Bernanke might have been suggesting that he just wants out of QE altogether, data be damned.  This would really be a big, fat ugly black swan!

Politicians think about their legacy in their final term. Chairman Bernanke's last term will see the December meeting as the last he chairs.  To do an about face like this as his term ends would call his legacy and that of his entire board into question, as their conviction and motives for QE would be suspect for being perhaps politically motivated.  It is also highly unlikely that he would do this as his hand picked successor waits in the wings.  This would place his successor in a very untenable position coming into a situation in which the world will be looking for continuity and stability, not fire fighting. 

So, if the conclusion is as we wrote about before, and the global economic issues are the real problem, where do the markets go from here?  Stay tuned over the next weeks for a barrage of damage control from euro politicians, think tanks and others.