By John P. Hussman, Ph.D.
The central issue in the current financial markets, in my estimation, is distortion. Because monetary distortion dominates the financial markets here (helped by fiscal distortions that have temporarily elevated profit margins about 70% above their historical norms), the only certainty is that short-term market fluctuations will be dominated by the vagaries of the near-criminal mind that dictates how far those distortions will be pushed. Investors cannot control that decision. Still, I don’t have a single doubt that over the full course of the present market cycle, investors will be better served by adhering to informed discipline than by tying their destiny to predictions about what the Fed will or will not do next.
