In the land of the blind, the one-eyed man is King. But the King still has to get the blind to follow.

Monocular Mr Bernanke appears to have such a problem. Inflation sits at 4.12%, Fed Funds are 2.25% - that’s free money - and yet credit markets will not budge. Still, not all is lost for it has set up a nice little sideline in public/private M&A partnership for the JP Morgans of the planet. With any luck this signals the return in full force of the generalised M&A and IPO boom thereby raising the value of all our under appreciated assets. Yippee - go Visa!

Scour the no-brainer encycolpedia and such symptoms might suggest that the wrong medicine is being over-prescribed. But not, it appears in the immediate aftermath of the cut, to the equity markets.

A Taylor Rule graph update:


The formula may not, like most of the public lately, be privy to the real-time information the Fed reacts to - but it still has its uses.

Stay sceptical.

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