Quick Take: The Bizarro Market

Riddle me this (to mix my superhero metaphors): Given that wholesale inflation came in at, oh, roughly twice the level that the Wall Street eggheads expected, why is everyone so sanguine on stocks today?

I find that bizarre, given that it looks to me like the only way Bernanke is going to lower interest rates is if some desperate mortgage broker slips a dose of horse tranquilizers into his highball. Apparently, Mr. Market doesn't agree, because I see an awful lot of happy-happy-joy-joy out there -- especially in the kind of companies that have the most to lose from inflation and/or higher interest rates, outfits like Alcoa (NYSE: AA), Caterpillar (NYSE: CAT), Joy Global (NYSE: JOYG), Lennar (NYSE: LEN), and Pulte (NYSE: PHM).

In fact, despite the recent, rapid unspooling of the Great American Housing Ponzi Scheme, it looks likely to me that Helicopter Ben is going to tighten the purse strings in order to soak up the excess "liquidity" his predecessor squirted into the markets. The stock market "correction" that hasn't really come is ample proof that investors are feeling flush -- perhaps overly so.

If and when the Fed tightens rates to try and rein in the current whack-a-mole inflation, it won't make stocks any more attractive.

Comments? Bring them here.

At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.