Ben Bernanke, whether he got some coaching or not, walked the market back from the taper ledge yesterday, equity markets markets are rallying and yields came down a little. Who knows if the US market will keep today’s gains but the message seemed to be that the Fed won’t be an obstacle for now.
The transcript as follows;
And I want everyone to know–there’s not gonna be no trouble from me. Janet, a porta!
For now of course this is positive in that stocks have been helped higher by QE and ZIRP but of course everything we have ever been taught about capitalism says this is not how it should work, that there should be dire consequences for manipulating markets.
The US markets have gone up leaving most foreign markets behind in the rear view mirror. If there ever is to be a consequence for this then there could be a big reversal where foreign goes on to again outperform domestic but that could still be a long way off.
Remaining properly diversified with foreign developed and emerging has been tough on returns but ultimately the rules for long term investment success have not been repealed.