That is ok. It's enough to show banks with a nice paper gain. Window dressing is the best way to describe the recent rally. Don't be too surprised if it evaporates after bank earnings along with the paper gains on all the oil bets they can't unload.

Anyone must know QE not only is a horrible way to stimulate the economy but it's not just not sustainable, but merely stopping it creates a negative effect worse than the stimulus and it is impossible to unwind despite what Yellen says. The simple fact is she never meant to unwind in the first place, because it can't be done without causing a economic downturn.

QE is about as smart as a 5 year old thinking giving monopoly money to his friend in monopoly will help everyone move faster on the board. It doesn't. It merely distorts the game to the point where its not worth playing and people get frustrated and angry as hell.

There is little to be thrilled about this market upsurge besides the fact that it happened. Fundamentals are poor and inflation is rising which is not good if economic growth and earning growth are both slowing despite the Federal Reserve telling you otherwise. In fact, stagflation comes to mind before any other definition the Fed would like to name this phenomenon like "strong growth is around the corner". Higher prices do not by definition mean stranger growth, especially when credit worthiness is declining despite record low rates.

"Once you lower interest to zero, the market can no longer price the difference between a mal-investment and a sound investment. Price and risk discovery are dead.", you are correct in this and it is pathetic that the Fed realizes this is occurring even at zirp. The issue is most of the mal-investment is banks getting zirp and less the rest of the market that still must pay some amount for the right to borrow. Even so, there are huge distortions in the market as a direct consequence of artificially low rates. Risk is also not being correctly weighted. The risk in most investments due to asset price increases, lower rates of return, and less financially stable players is frightening.

To all. Lower your debt and deleverage after 6 years into any cycle. Especially one which the Federal Reserve has almost no ability to lower rates if the market cracks.

The recent bounce in China's foreign exchange surplus is clearly a result of the weakening of the US dollar during this period, however, this is not likely to last long unless US inflation starts to get out of control. The Fed may have awakened the monster that will eat its lunch even if it did so to create the illusion of economic expansion. As for China, it still needs to deal primarily with the fact that its currency is disjointed with its domestic currency trading at a steep discount to its internal currency.

Although people lambast China for devaluating their currency to the dollar, nothing can be further from the truth. China tried linking its currency to the dollar and has suffered the consequences as it can't keep up with it and the stronger currency makes it less competitive. The RMB will need a lot more support to keep from devaluating further and the author is right, the short blip does not make a trend. The trend is still China trying to keep currency stability the badly needs devaluating as it is allowed to reach free floating stability.

The only reason for it to fall in the short run is if its growth or earnings fall or the whole economy's slowdown causes a major drop. Some weakness in Apple cell phone sales appears to already be priced in. I don't put too much faith in charting for Apple's stock price movement.

The recent market bump up and the dollar weakness are indeed correlated and I agree with the author that they are not sustainable. Likewise, the oil rally is more to do with this effect than and depletion of the glut. Don't take the musing you hear on Wall Street and from the Federal Reserve about the upturn in stocks and the economy at full value. This upturn is both artificial, manipulated, built on lies, and not sustainable.

Keep watching what counts for stocks, earnings growth, sales growth, and profitability. There is no justification for higher valuation without these turning positive.

Keep watching interest rates on real estate which is artificially high for decades now due to artificially low rates. Increases in interest rates by the Fed or increases in housing loans due to risk premiums which may rise as the economy falters, people's debt load get bigger along with defaults, and risk appetite wanes also may play a factor in this manipulated market which once again is now a socialist house of cards built on government Fannie and Freddie loans and not the free market. Because of this you won't see the rumblings before the market collapses because it is not 100% or even 50% operating as a free market economy. It is more a Chinese housing market than a capitalist market now and is why you should not consider your house as a safe investment anymore. It's value is in the hands of the central bank and the government from its price to the policies determining its salability.

Watch the economic growth minus across the board inflation and total unemployment for your future prospects. Even a minor increase in inflation will decimate many people already living on the edge and inflation in housing, rent, education, medical costs, drugs, etc. have created a new class of middle class poor. With economic growth reaching towards zero, it is no wonder pay is not increasing and where it is your jobs are disappearing to finance the wage increases.

All is not well in the socialized command economy the central bank is boiling us in. If the only way out is through the fire, bring it on. Quick pain at the chance of living beats slow pain with a guarantee of dying which Japan's economy is going to reach in our lifetime.

The simple fact is that gold is primarily being driven by paper gold which is not fully backed by physical gold and has been undergoing bigger and bigger leverage making paper gold as unstable as currencies and probably even more manipulated than other currencies. Until this is resolved, if gold rocketed upwards many thinking they own gold will find they own useless paper worth less than even devaluating currencies.

As for the US economy and monetary policy, I have not seen a central bank strive to undermine their economy and capitalism as hard as the Federal Reserve to get permanent QE powers, keep feeding their banker friends with zirp policies, and destroy capitalism. Sure the Federal Reserve is following Japan, however, Japan's frog has been passively boiling for decades now. The US central has actively joined them not for economic or fiscal need but for no good reason besides artificially enriching banks and increasing their powers. Sadly, this will make the dollar even more expensive not less as they addict the US with debt poison, discourage savings and investing and then collapse the economy, print more liquidity and buy more assets from the US population at discount prices. The Fed and bankers are no fools. In the end real wealth is owning something besides paper money, especially when you can make it out of QE.

Don't reach for debt and save even if they eventually get the right to tax your savings with negative rates and fleece your retirement account. Having some assets is the only thing that keeps you better off than those living in a socialist system who have nothing at all. By the way, debt is not an investment and assets with debt are not truly yours especially when their value drops below the debt you owe on them.

Good article and a enjoyable read. Sadly, central bank stimulus and the lack of it is now driving our economy like it has done with Japan. Sadly that track leads down from low to no and eventually negative growth. And as stated before by the cynics, there is no way out of the put the Fed puts us in besides suffering horrible to climb out of the put and contract our economy until we get back to safety. Thus, we slowly roast until growth and capitalism dies and is replaced by stagnation and decay and planned economy socialism market by extreme corruption masking itself as capitalism with a conscience.

There is no capitalism or conscience in Fed policy, only the bling grab of power and wealth at the cost of America's economic heart which provides the lifeblood to a free, capitalist economy.

Sadly Fed induced prosperity is often not real prosperity and worse yet, it is not sustainable. The best Fed is the Fed that uses its chips to help us out of economic troughs and doesn't manipulate the markets and undercut capitalism.