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June 18, 2013  Tue 8:12 AM CT

To me, the question is simple: Are there enough strong data to risk ending a program that has meant so much to the housing and stock markets? Is there enough employment growth? Are there enough construction jobs? Is commercial real estate coming back? Do the employment claims and the payroll number affirm the need to tighten, which, de facto, is what going off the bond program means?

Everything must go through this prism before the Fed cuts back--and I have to tell you that it is a mixed picture. And if it is mixed, I think the tie goes to the need to buy bonds.

Take yesterday morning. The Empire State report was better than expected, but the components, orders, and employment weren't good. So what's the point of changing on that front?

The housing market is indeed coming back, but it is probably not strong enough to withstand a sudden shock to the system like what we got. It is certainly screwing up a lot of transactions. At the same time, we would like to think that everyone who needs to refinance has. Yet, if your house is underwater, you haven't been able to refinance, so we would hate to see that go away. Plus the Fed has been a huge factor in buying mortgage bonds from Fannie Mae and Freddie Mac.

There isn't much of a market for these otherwise, except mortgage REITs, and they seem to be cutting back their buying. The banks themselves have record low mortgages on their balance sheets, which is how the regulators want it to be. It is beyond difficult to figure out what a Fed pullback would mean to this industry that is so dependent on the Fed for its sustenance, even as we need more than 1 million homes for certain. logoOr take the export market. We know that it had started to get robust, but the turmoil associated with the end of bond-buying has crushed these markets and left people wondering if the Fed could hurt growth attempts everywhere--growth attempts that are in their infancy. It just seems too brutal to me.

Yet maybe this is a good warning for what's to come, and if the Fed can somehow keep rates from flying up because the data doesn't warrant this big a percentage move, then maybe the pullback gives people a chance to extract themselves from these snake pit.

How about the wealth impact? We know that the wealthy have been spending like mad. We also know that the wealthy respond to the stock market as a creator of disposable income. You take its performance away and you run the risk of tinkering with the one part of consumer spending that is strong because we know from Wal-Mart and Target and the dollar stores that things aren't robust. Again, a tricky balance.

Perhaps the best way to look at this is to say that the Fed can simply come out tomorrow and say we see some strength and some weakness but there's no reason to back away from our plan given that the weaknesses would quickly overrun the strengths at this particular time.

How do we know this? Because by the end of the week the strongest stocks in the market were the recession-proof stocks. It was tough to tell given that many of them also happen to be fixed-income equivalent stocks, notably Johnson & Johnson, General Mills, Merck, and Pfizer. It tends to confuse things, but it is certainly a confusing moment.

The key thing for the Fed to do is explain what pieces of information leading to job creation reaching 6.5 percent that it is looking at. What tells us when the Fed will be stingier?

Right now, we don't know. Let's hope we get clues tomorrow, because the market is clueless right now. And that's just plain bad for business.

Disclosures: Cramer's charitable trust has no positions in the stocks mentioned.
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