We Need the Eggs

There’s an old joke retold by Woody Allen in the movie Annie Hall:

“A guy walks into a psychiatrist’s office and says, hey doc, my brother’s crazy! He thinks he’s a chicken. Then the doc says, why don’t you turn him in? Then the guy says, I would but I need the eggs.”

Isn’t that the essence of the market we’re in? The US has $28 trillion of debt and much more on the way. The Fed’s balance sheet stands around $7.8 trillion. Stocks are trading at silly multiples. The bond market, the last bastion of truthiness regarding the economy has gone mute in spite of spiking inflation.

We know that all of these things are a special kind of crazy that has never ended well in the past. But, the economy is counting on this go-for-broke craziness to give the appearance of normality and, if we’re lucky, pump out a little wealth effect to the 99.999% without yachts – hopefully enough to offset inflation.

We go along with it because we need the eggs.

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Futures are almost back to green, regaining 26 points of their overnight lows on the latest failure of VIX to hold its 200-DMA – the 8th cross in the past 8 sessions – and its subsequent 20% beatdown.

While this morning’s economic data continues to disappoint (Phil Fed 31.5 vs 42 est.) markets are heartened by the prospect of continuing Fed intervention.