I say unfortunately, because after 8 months of being burned, Wall Street's perpetually bullish narrative followers refuse to read the facts. The end to this story is going to be a painful one for the US equity market to traverse.
From the mass media to the sell side, we have ourselves a mania in "Fed Watching" - I call it Fed Centricity . As a psychological factor, never in the history of any book I have read on markets has there been anything remotely as amplified as the US Fed Centric view that has emerged.
While sitting here on the research floor at Research Edge right now, I am watching Brazilian Central Bank head, Henrique Meirelles, give the Bloomberg TV reporter a tutorial on objective and proactive monetary policy. The reporter looks awkward. And After raising rates to over 12% in order to fight inflation, his stock market and currency is strong, and unlike US policy panderers, he looks right.
Former Chancellor of the Exchequer in the UK, Nigel Lawson, also sounded very sober and right this morning in pointing out that Ben Bernanke and Co. are going to "regret" not following their weathered European colleagues in fighting inflation.
Manias never end well. Bernanke's legacy won't, and neither will the performance of the US investor who is levered long to a US Fed Centric view.
Larry Kudlow's mass media program ends nearly every segment with the tag line that Free Market Capitalism Is the Best Path To Prosperity! ... but Kudlow wants the US Government to intervene at every turn?? That's not free market capitalism Larry - sorry ... you've been 'You Tubed'.
Fed Centricity is something to be weary of, and we have our Eyes on it.