The cowardly dithering in the Eccles Building is sucking Wall Street punters into a vortex. And it promises to be the mother of all bubble implosions.
There is no other possible outcome for a stock market that is trading at 24X reported earnings in the teeth of the most enormous headwinds ever accumulated.
The intensifying global deflation/recession lapping upon these shores gets more ominous by the day. Yet that’s only the half of it.
When you take an unvarnished look at the domestic economy, the real skunk in the woodpile becomes apparent. That is, the casino is essentially capitalizing earnings as if recessions have been outlawed and the nirvana of Keynesian full-employment has become a permanent condition, world without end.
Today’s bubblevision meme that all is well because the Fed judges the economy to be strong enough to absorb 1% money market rates some time next year is just a manifestation of that permanent full employment delusion. After all, earnings always collapse during a recession—–so implicitly there is not one in sight as far as the eye can see.