Nothing heightens the surety of what you are doing in the markets than having magical forces from Mount PropUp sweep in to mudddle with the status quo.
The Quo is the steady disintegration of the Dow as it begins to reflect the reality of the economic condition in which we are living. In a world where asset values are falling (dollar/homes/debt) there is no reason for the major stock markets to remain levitated, and yet that won't stop Bernanke the Wizard from using all his powers to do just that.
While some of us (aka me) sat waiting for next week's Fed news, Bernanke, again, pulled a preemptive with the help of his wizard friends in Canada, Europe and elsewhere.
I am not quite sure of the incantation used, by it was something akin to taking the pigs from the village and offering to turn them into stacks of gold. It was not made clear how long the spell would last, but enough people became enthused at the prospect that the markets rose into the air by 416 points.
Yesterday was staggeringly annoying. For ultimately if the problems in the village are not fixed (that problem being excess pig speculation), then we are certainly not out of the fat.
What is worse, however, is the manipulation. Let us wax philosophical for a moment.
You know how people often ask why God does not stop evil? Many people take that question and drive their souls right into the twin villages of agnosticism or atheism.
Let us here think of Bernanke the Wizard as God, and the economy as, well, the world.
We can observe that every area of our economy is hurting not by some arbitrary process, but by the deliberate actions of various groups of people. Homeowners overeaching. Mortgage brokers being a wee bit too aggressive or crooked. People's lack of savings. Wall Street's financial engineering.
In essence God, in the form of Bernanke, gave us life (low rates), and we did some mighty crazy stuff with that financial freedom.
And now we sit, hand in the air saying, "What the hell?" Politicans are pontificating and promising to save us from the evil (of our own doing). Fingers are pointed. Homes are lost. Businesses fall under the weight of sin (debt).
So what does Bernanke, the Wizard do? He can sit back and let free will reign, where every man's will and choices are respected and the chips fall where they may. For why go totalitarian and make people behave? You don't want to force people do be good and create a restrictive environment. That surely is not what you want capitalism to be.
Or, you can interfere, which is what Bernake has chosen to do. He did that yesterday, and a few weeks back, and to little effect. In the process of this interference and attempt to save man from his own freewill, he has in fact violated the freewill of others who did not want the interference. For every time forces from the blue come in arbitrarily, it prevents the individual from making any financial action with confidence.
That is what you get when God makes everything right. You get less freedom. A God who stops evil is a God who keeps you chained to his better judgement, thus defeating his very purpose in giving you life. (That would be, to have free, creative individuals who choose his company by choice).
Bernanke, however, is not quite God. He is a wizard with certain limited powers. None of those powers include the ability to raise the dead, make people do right, or turn illogic into logic, or pigs into gold for more than a few minutes.
Thus we will suffer until our sins are reputiated. Like the prostitute loving governor of New York, Elliot Spitzer, many of us will refuse to acknowledge the results of our own freewill.
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