Here we are. Markets are on there highs. Bears are more bearish than ever while the Bulls are looking down at some real damage. The Fed has reiterated its drive to leave no fall back room in asset price rallies, that is, if it can help it, or for that matter, if it can even understand what it is doing and the consequences for market action.
Free market economies, as they are called, have come under the collective interventionist theory that any natural market corrective tendencies are not to be trusted and only the subsidisation of banks and some sovereigns will properly place the world in its right place. Now that place always looks like the top 1% of the world’s wealth but someone has to guaranteed happiness.
Bernanke has decided that all of the top should get a trophy just like they do today in our competitive sports environment for children. Every one gets a trophy, even if you stink. It is better to feel good about yourself than to face up the the fact you have absolutely no talent. But like the soccer mom he is, Bernanke insists we should be able to guarantee a financial system which isn’t reflective of how talented banks and investment firms are, rather it should be a statement about how wonderful it can be. Wishing is so much fun. It makes us all feel better, now doesn’t it baby.
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