The Bernanke Bubble Gets A Little Bigger for Wall Street
August 31, 2012 3 Comments
The Bernanke Bubble Gets A Little Bigger for Wall Street
By: Todd M. Schoenberger, @TMSchoenberger
Since the Labor Day Weekend officially begins at 4EST, at least for the good folks working on Wall Street, I’ll make this note brief.
It’s this simple. Ben Bernanke did exactly what Ben Bernanke was expected to do today: Nothing. The Chairman isn’t required to make the stock market move higher (yet, it’s doing this on its own with the S&P 500 at +11.3% for the year, going into today). But some on Wall Street seem to be of the belief this is the Fed’s 
job and, ridiculously enough, its obligation to investors.
Bernanke addressed a crowd of cameras today from scenic Jackson Hole, seemingly telling the world that “we’re ready to act [with further easing], and we’ll be keeping an eye on inflation, growth, etc, etc, etc.” Yes, it was a lot of yadda yadda yadda.
The markets initial reaction was negative, and that’s only because people don’t understand how this thing called Wall Street and monetary policy planning works. But, equities recovered and stocks are up strong. Actually, everything seems to be working today.
Treasuries are soaring, especially on the long end of the curve. Gold is through the roof. The Dow Jones Precious Metals Index is up over 3 percent on the day. Oil stocks are doing well, thus proving the “tease” means more weakness in the dollar.
The only area lagging seems to be real estate stocks and that’s because with no imminent QE, there’s no certainty mortgage rates are going to remain low. However, it’s not like depressed rates are doing anything for the housing sector anyway.
But, that’s it. Enjoy the party. Tuesday will be a rough day, but equities should recover later in the week going into Friday’s jobs report.
Have a fantastic weekend, folks! Get some sun and enjoy the last official weekend of summer. Ciao!
About Todd Butterfield - (CEO, President) The BlackBay Group
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