Still Overvalued. In other words, the Goldilocks future, where the Fed manages everything perfectly, is likely too optimistic.

Monetary Mayhem Clouds Crystal Ball. At present, the futures market appears to be pricing in three more rate hikes this year, 25 basis points each, with one rate cut of 25 basis points very late this year.

Second Thoughts on Bernanke’s Nobel Prize. The Bernanke approach did not include fixing mark-to-market (MTM) accounting, which was the key ingredient that turned a limited financial fire into a raging inferno that almost burned down the entire US financial system.