Bullet proof traders, firmly entranced by the Bernanke Put (squashing the moral hazard that was once known as the Greenspan Put), are inching up the market minute by minute in anticipation of a confirmation of easy money forever at 2:15 PM. The level of complacency is quite awesome, as it has been seemingly pre-ordained we can only go up from here.
It is now all set up perfectly, with the market now approaching the 50% retracement level of the losses from October 2007 – March 2009. We were here earlier in the month but fell back, but now the rocket fuel has been stored, the giddy speculators are standing over the plate and all we need is that 82 mph fastball over the heart of the plate served by the Person of the Year.
This is going to be very tricky because surely the market will herky jerk in both directions and clear S&P 1120 as lemmings scream in joy that their world has of speculation won’t be hampered by Bernanke Claus. I’ll probably hold off buying until the gap up tomorrow morning ;) since this move, off such a long base, should be huge (I am thinking 7-9%). p.s. does anyone left on Earth believe we could actually break down (rather than up) out of this range?
I am getting flashbacks as I see the hero worship of Ben Bernanke who apparently SAVED THE WORLD.
Yes, indeed… something stinks smells familiar about all this [Apr 6, 2009: Larry Summers – No Conflict of Interest; He Pinkie Swears] If you are not familiar with this pathetic merry go round of crony capitalism please read that post. Talk about 3 people at the heart of the crisis, whose “work” in the 1990s really set the table.
I stick by my case that just as the ground Alan Greenspan (the “Maestro”) walked was worshiped for nearly 2 decades – until his “solutions” all were exposed… Bernanke will be no different; it might take 3 years, maybe 5 – maybe 10. Eventually the markets will overcome his historic band aid “solutions” which are just the largest kick the can moment for a country who has spent 3 decades making it an art. We’ll be laughing at this Person of the Year cover just like the one above will outrage anyone who has dug into the history.
p.s. Let’s not forget Robert Rubin, he of $100M of compensation the past 10 years to help guide Citigroup into the arms of the taxpayer, after repealing Glass Steagall as Secretary Treasury and riding off for his reward for “good work for the country” into the arms of the oligarchy immediately after.
One thing never changes – human behavior.