“John Hussman’s weekly letter has some excellent insights into the unusual market conditions we are currently confronted with. Clearly, the Bernanke Put has exacerbated moves in just about every market. The result is an ever increasing disequilibrium. This, after all, is what the Greenspan/Bernanke Put has been doing to the market for the last 25 years. Rather than allowing markets to be markets, the Fed has felt the need to coddle and “talk up” markets at every chance possible. They see this as some sort of positive contributing force. I see it as a highly destabilizing market force that significantly contributes to the volatility of the business cycle. The market is not the real economy. Therefore, focusing government policy on nominal wealth creation is just another way of putting the cart before the horse.
So, just how extreme are the current conditions? Mr. Hussman notes:…”
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