Seems like the three thousandth or so “market rallies when Bernanke promises more goodies” episode. Frankly, I’m more than tired of it. The Fed’s manipulations only dig the economic hole deeper and deeper, by favoring consumption over critically needed savings and investment. And anyway how is it possible that anyone with even a minimally functioning brain can look at the results so far, to say nothing of the results of twenty years of similar efforts by the Bank of Japan, and conclude that Bernanke will have any success whatsoever in resuscitating the Ponzi created over the last thirty years?

But that doesn’t matter to the boyz, who will take any excuse to deny reality. And every time they do so, they steal from the future.

In the real world, economic collapse is coming closer every day. I know I was going to lay off reposting stuff from zero hedge, but for archival purposes I do record the following from Albert Edwards at SocGen, arguing for a target of 450 on the S&P :

Investors cannot move for the weight of broker research comparing the current conjuncture in the US with Japan a decade ago. While bond markets at least, move to discount deflation, most sell-side analysts still say the current situation is unlike Japan a decade ago. They are right. Things now in the US are much, much worse than Japan a decade ago.

Equity investors are in for a rude shock. The global economy is sliding back into recession and they are still not even aware that these events will trigger another leg down in valuations, the third major bear market since the equity valuation bubble burst.

This lack of awareness reminds me of reports this week that a 35 year old Polish man hadn?t noticed for five years that he had a bullet lodged in his head. Like the equity market in 2000, the Polish man had been partying too hard to notice that he had been shot. The BBC report the police as saying “He told us he remembered having a sore head, but that he wasn’t really one for going to the doctor.”

As the equity bloodbath of the last decade enters its final, even bloodier phase, investors continued optimism also reminds me of the Black Knight in Monty Python & the Holy Grail – link. Despite being grievously wounded by King Arthur, the Black Knight makes light of his injuries which he dismisses as a flesh wound. The vast bulk of the investment industry fails to appreciate that we are locked in a structural bear market and about to enter Act III.

Personally, I think he’s on the high side. But, whatever. I would take it.