Fed Bubble is Now Common Knowledge: A John Galt Moment?
Feldstein smiles at one of his star pupils
Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
One of the “elite,” conomist Martin Feldstein was once considered one of the finalists for Greenspan’s spot, before a true sycophant, the Bernank, was appointed. The rest is history but seems Feldstein is having an Atlas Shrugged, John Galt, moment about what has transpired.
“The stock market is, I think, responding to the Fed. I think the real danger is that this is a bubble in the stock market created by low long-term interest rates that the Fed has engineered….The danger is, like all bubbles, they burst at some point”
Other John Galt moments include the veteran investor space as another hedge fund titan, John Arnold closes shop in the energy arena. Rejection of the liquidity only theorem at work here? How long would any entity, let alone the balls to the walls moral hazard types survive in even a slightly more normalized world?
Another sign that John Galt Investor has about had it with central planned ‘conomies and markets combined with Ministry of Truth black propaganda are CNBC’s ratings. They are falling off a cliff. Some point the finger at Andrew Soskin, but he is merely a symptom. I see it as more disgust and disinterest in Fed Bubbles, TBTF rigged, manipulated markets. Another -$1.6 billion outflow from domestic equities, marking 10th consecutive weeks. This results in more vaccum tube trading, no depth, algo addled markets, with the few remaining participants drinking heavily of the spiked Kool Aid.
Tuesday ISM release and subsequent vacuum tube rally took the cake. It was an contradiction among a half dozen other data points pointing to ‘conomic rollover. We see a repeat of katie bar the door run ups, followed by reversals, wash, rinse, repeats.
Frankly how does anybody plan or do forecasts in a central bank bubble world. Clearly the quick buck artists aren’t even trying, but are merely gambling away. Memories about Worldcom, Enron, LTCM, and Lehman Brothers seem short. The Chesapeake Energy story shows that there are land mines out there galore. One has to ask, how long would some of these entities last without ZIRP, and the too big the fail crackpot theory? Only days would be my prediction. These implosions will take their governments with them.
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