Ben Bernanke apparently has a new title and it’s a bit of a promotion - from “Chairman” to “Whipping Boy.” It used to be said that Chairman Greenspan was the second most powerful man in the world and / or the most powerful man in finance. Based upon a lot of the recent commentary and market action, Whipping Boy Ben may be even more powerful than his predecessor (hence the “promotion”.) It now appears that Ben is responsible for ALL the faults and shortcomings of everyone in the market. Sorry Charlie - he is the real “All Powerful Oz.” When a stock goes down, blame Ben - he controls everything and allows you to take no accountability for your own decisionmaking. It’s so much easier. You still lose money, but isn’t it great to blame one guy (as long as it’s not yourself) for the market’s problems?

Of course I am being sarcastic, but there is way too much truth to this absurdity. This market is way too focused on what one guy is saying and doing or what he should say or should be doing. The last time I checked - our market is made of millions of investors who are responsible for determining equity prices. I’d like to get back to the days when we believed that individual participants impacted the market and individual companies were responsible for their financial performance.

Let’s reflect on some facts - the prior Fed helped to inflate the economy in the 90’s and then helped to deflate it. Most likely, they went too far on the way down to 1% but not too many people were concerned about that. Chairman Greenspan’s Fed raised rates 14 times in a row and except for the last few of his moves, I didn’t hear too much complaining. Even before Bernanke took his oath, investors started betting that would put an end to it. Now that he has disappointed them two times, Ben is somehow getting it all wrong. I have heard commentators (many of whom are economists) appear on CNBC and Bloomberg who are now talking about Ben’s “credibility” problem and his “image.” It’s laughable coming from economists that place their bet on almost every economic data point and as you would expect, most miss the actual results when they are released. It’s way too tough to predict those things and it’s even tougher to predict what the Fed has to predict. As far as I am concerned, the real credibility problem is with the rest of us - investors, economists and financial media that are focused on blaming Ben rather than looking in the mirror. For my part, I cannot remember one wrong signal in Hedgefolios that was a result of anyone’s failures except my own and I know for certain that Ben had nothing to do with it.

As we know, “Don’t fight the Fed” has a traditional expectation that as the Fed tightens, stocks decline and vice versa. The past two unidirectional moves of the Fed have not supported that theory. From January 3, 2001 when the Fed Funds Rate was at 6.5% until they stopped lowering at 1% on 6/25/03, the S&P 500 declined 27%. The current sequence of rate hikes started on 6/30/04 and yet, the S&P 500 is up 11% over the past two years. I am sure all the experts who are critical of Ben have a very good explanation for this and yet, I really don’t care.

This market has problems and in my opinion, the infatuation with Bernanke is only masking the bigger issues. I want the Fed to be done so I don’t have to hear all this “credibility” talk. Maybe then we can get back to a market that has more to do with companies, profits, losses, valuations, investors, etc. and less to do with a whipping boy.