Stocks are down about 1.5% today, after Bernanke’s speech Friday yielded roughly the same increase.
Stock investors, still it seems, are addicted to the Greenspan/Bernanke Put. But apparently the half-life effectiveness of the Put, at least as regards discussions about the Fed’s rescue of the world, has declined to about a day, or so.
Monetary manipulations, and discussions about monetary manipulations, are to the stock market about the same as heroin is to a junkie. The high fades quickly, and the next hit has to be bigger to achieve the same effect. In the meantime, nothing real changes. The junkie is still in the gutter, with tell-tale needle sticks on his arm to prove his addiction. So too is the economy still in the gutter, with drug-dealing zombie banks on every street corner, to be sure the addict never feels any pain.