We’ve had an amazing run in the markets and many people think the bull will just keep on running. Maybe so. But eventually every bull runs out of steam even ones which are fed by the Fed.
Can’t you just feel the excitement in the economy? It’s palpable. Boom. Boom. Boom. Good times! Happy days!
Japan had “a lost decade.” Then it had another. We are past the halfway mark of the American “lost decade.”
Keynesianism has failed utterly and completely. It’s not that there wasn’t enough stimulus. It’s that the concept of “stimulus” is bunk. It’s real “voodoo economics.” It is a cult. A dream. And as is increasingly obvious even to the Keynesians, a nightmare.
In the attached article from CNBC the point is made that the real bubble is likely an inflated confidence in the Federal Reserve.That come what may, the Fed will intervene in markets and buoy them. So what if stocks are over extended, Yellen and the FOMC will save the banker’s posteriors. As we’ve said before this sounds very much like “housing prices always go up” to us. If sentiment regarding the Fed were to change, if traders were to fear that things were bigger than the Fed, a downdraft could be wicked.
We’ll see. There’ve been many blips over the past 5 years and for the most part the pro-Fed folks have been right as far as equity prices are concerned. (Little else.) Maybe this is just another blip on the way to Dow 20,000 and beyond.
But maybe not.
At best we have been treading water since 2008. Check that, we’ve been treading water while the tide continues, unrelentingly to go out.
The Fed’s Consumer Financial Protection Bureau is a crony capitalist’s dream, but don’t expect to read about it in the press, especially in Bloomberg.
In the story below, a Bloomberg reporter refuses to acknowledge that the Consumer Financial Protection Bureau is renting space from an Obama bundler (major fundraiser) while its boondoggle building is being built.
The market keeps going up so things are good right?
What is with these guys? They hate free prices. They hate human action. They deeply fear the market mechanism. They want to believe that THIS TIME they can get it right. They can beat the natural ebb and flow of markets. They can manage what can’t be managed. They are smart enough. They can do it.