Tornado Alley (PROG)

[SilverSurfer]

Pat should confer with D.S. ....

Bernanke doubled the Fed’s balance sheet from $850 billion (built-up over 94 years) to $1.8 trillion during the seven weeks after the Lehman event; and then by the thirteen week mark in early December 2008 he had nearly tripled it to the $2.3 trillion. Moreover, once the genie of rampant money printing was out of the bottle, it did not take long to invent the pretexts for QE in its quick succession of phases and details. In a historical heartbeat, the balance sheet of the Fed soared to $4.5 trillion, eviscerating the last remnants of honest price discovery on Wall Street as it rambled upward.

The graph below (article link below) is blinding proof that the S&P 500 is now a complete creature of central bank liquidity and manipulation. Like clockwork, the dips have become shallower and the rebounds more resilient. Given the faltering nature of the domestic recovery since 2009 and the self-evident headwinds issuing from all points in the global economy there is not a snowballs chance that this chart would have been generated on the free market in response to honest price discovery along the way:

http://davidstockmanscontracorner.com/why-sp-2000-is-a-fed-manufactured-mirage-the-buy-the-dips-chart-that-says-it-all/

or most anyone else who understands money.....

Many analysts, including me, believe that the stock market's persistent strength since the start of the bull market was in part, perhaps large part, due to the Fed providing liquidity in the form of low interest rates and its bond buying program (quantitative easing). Excess liquidity usually finds its way into the stock market.

Indeed, many studies show that since 2009, the stock market's rise is highly correlated with the expansion of the Fed's balance sheet. During each round of quantitative easing, stocks rallied. And between rounds, when there were no purchases, the market stumbled.

http://online.barrons.com/news/articles/SB50001424127887323949604580117761840375990