“Don’t fight the Fed” is a phrase that has been in existence for decades, and has been heard often, especially lately.
Other related phrases heard include “the Fed’s got your back.” And, of course, “the Bernanke Put” and, while Greenspan was Federal Reserve Chairman, “the Greenspan Put.” Many of these phrases seem related to the “That won’t be allowed to happen” mentality that I wrote of in the July 7, 2010 post.
Do these themes have credence, especially in today’s economic and investment environments? Of course, time will tell. But, I continue to believe that placing undue faith in such themes is exceedingly hazardous, especially at this juncture.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1332.75 as this post is written