Submitted by David Stockman – The Contra Corner Blog
The current stock market melt-up hardly qualifies as limp. Even the robo-machines and hyper-ventilating day traders apparently recognize that their job is to tag the May 2015 highs and then get out of the way.
So when and as they complete their pointless mission, the question recurs as to why the posse of fools in the Eccles Building can’t see that they are inflating one hellacious financial bubble; and that when it blows it will deconstruct their entire 7-year project of make-pretend recovery.
In fact, if it weren’t for the monumental pain and suffering the next bubble collapse will bring to main street, you might even be tempted to urge them on toward the Wile E. Coyote moment just ahead. After all, if 84 straight months of ZIRP and $3.5 trillion of fraudulent debt monetization (QE) brings nothing more than another thundering financial collapse, it will be curtains time at the Fed.
And here’s why they can’t duck the blame this time with tall tales about a global “savings glut” causing lax underwriting in the mortgage market, or the lack of transparency on Wall Street balance sheets. The fact is, stock prices are just plain nuts given the intense and manifold global economic headwinds and the advanced age of the US business cycle. Continue reading