Ben Bernanke: The Other Side of His God Complex
The FOMC paves a problematic path for future generations.
As the no-taper euphoria spreads throughout the markets and Bill Gross takes a "victory lap" on CNBC, chatter abounds that the non-action by the FOMC is a discernible step in the direction of Janet Yellen, who has never been accused of making doves cry.
The resulting price action smacks of a blow-off top -- or "panic" in our emotional continuum -- given the landmines littered across our financial landscape. It's difficult to ascertain how long this will last but the conditional elements of a painful "off-sides" are seemingly in place.
While emotion is the enemy when trading, I find myself absolutely disgusted by the policies that are paving the path for future generations. I have little doubt that Bernanke's legacy will follow that of his predecessor, Alan Greenspan, and that the ramifications will be entirely more profound than a financial crisis.
I choose my words carefully; after 23 years of trading and thirteen years of real-time writing, I've learned to measure what I share, for once it's out there, it's out there. And this isn't my P&L talking; I've taken a step back from making big bets as the price action stopped making sense to me some time ago. There's no shame in admitting it's hard; there is only shame in... well, you know.
Foreign holders of dollar-denominated assets are none too pleased at what they perceive to be selfish, short-sighted policies that are destroying the standard of living for our children and raising the stakes in the government-guided system formerly known as capitalism. While the markets are painting a rosy picture, this is a sad day in what has been a prolonged period of maddening policies intended to thwart the very existence of the business cycle.
With the S&P (INDEXSP:.INX) at all-time highs and the VXO (INDEXCBOE:VXO) approaching decade-long support, take this for what it's worth and enjoy it while it lasts. It's never wise to mess with Mother Nature, and if the past has any semblance of a tangible prologue for the future, she must be extremely agitated as Bernanke continues to demonstrate his God complex.
One day, our grandchildren will ask us what it was like to live through this period; our decisions from this day forward will help shape what we share. Choose wisely and think carefully; we're officially dancing on the head of a pin.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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