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Fed Reserve Bank President Richard Fisher is at it again, and we have to cheer. Finally someone is drawing a line in the sand. Pointing to a conversation he had with Alan Greenspan six years ago as he mulled over taking the job, Fisher asked "The Maestro" how he could best serve the system. The reply was: "Just speak to the truth." Considering these comments came from the man who played a pivotal role in setting the stage for the Great Recession, one could say the "truth" is different to different people. However, there is only one truth now and that is the Fed has gone too far.

So, Fisher isn't going along anymore, vowing to vote against any additional efforts at quantitative easing.

Now he is going further, telling political authorities "don't look at us, look at yourselves" and to be disciplined. He says no amount of accommodation can help what ails America; people are out of work. Citing easier credit and rising speculation, Fisher speaks in almost evangelical tones about not adding more fuel to this fire. He's not a lone voice, even at the Fed, but it's still about Bernanke and his helicopter. I'm not sure that higher rates from the ECB or BOE will make any difference right now.

Inflation Cutting Confidence

It's all about inflation that the Fed says doesn't exist and the White House asks us to put into proper perspective. Despite denials and fuzzy logic regular folks get it. Not only do people see with their own eyes at grocery store receipts being higher, they don't think it's going to get better. The Michigan sentiment reading out this morning was a shocker. Consensus was for a headline reading of 68.0; the actual figure was 67.5, down from 77.5 in just one month. Even more shocking was the expectation reading of 57.9 down from 71.6; it was the lowest since March 2009, a mind-numbing month to month collapse.

If people react the way they feel, or at least tell, pollsters would believe a double-dip in the economy is more than real…it's inevitable. We can't expect the worst and go out and spend money. I'm not sure when plunging sentiment becomes defensive actions on the part of consumers. Savings have already begun to edge higher.

(Click chart to enlarge)

But, why is the market rocking? I honestly can't connect all the dots, but will just toss out some rationale:

It's the only game in town?

It's a reflection of the future?

The world can't get worse so it's going to get better, and that includes the stock market?

Valuations are attractive?

The Fed will print more money no matter what Fisher says?

Business investment boosted the final GDP number?There are many more potential reasons for the market to be higher but they all feel like a stretch at this specific moment in time.