If you ever doubted that bad news is good news... have faith!
Don't think, Buy!
As we noted previously, Jim Bullard broke the narrative... [4]
Bullard's comments changed all that. Having been conditioned to 'know' that money-printing means rising stocks (over the past few years), his comments provided support for the view that if things get worse economically, then The Fed will be back with moar money-printing and stocks will rise.
In other words, the fact that equity valuations and fundamentals are entirely decoupled is not irrational exuberance, it's a rational conditioned reflex to a Fed that will never - ever - as Alan Greenspan noted - be able to remove itself from the equation.
"Bad News is Good News" - Thank you Mr. Bullard.
Let's just hope that this week's jobs number is terrible, or this wealth-creating idiocy will come to a rapid end.
Chart: Bloomberg
