Ben is to the stock market as Lance Armstrong is to bike racing.

Why the steroids Ben? The "emergency" rates don't seem appropriate when stocks are at record highs.  Are they emergency rates still? Accommodative?  Accommodative for what?  Higher employment?  Well, low rates creating 'maximum" employment is a theory and we haven't quite proven its effectiveness in an international arrangement in which cheap labor around the world supplies us, indirectly, the manufacturing for our needs and wants.

And what of the third unspoken mandate of the Federal Reserve? "Moderate interest rates" are supposed to be maintained by the Federal Reserve per its mission statement.

Record low interest rates are not moderate by any metric. The term moderate refers to "not extreme."  These rates are extremely low.

As long as Ben Bernanke decides to keep money loose, the stock market will rise.

Restated, as long as one man holds to one mindset, the market will rise.

Does this sound like a free market?  Or, does it resonate as a managed affair sponsored by a semi private powerful agency run by one unelected man? Bernanke is arguably the most powerful man in the word without a military.

As models and programs chase historically modest dividend returns one wonders of the fragility of this entire arrangement.  The money is in a forced accommodative low rate mode by the Federal Reserve.  It is reasonable to assume that free rates would be somewhere above the current near zero rates forced by Bernanke.

Rates are forced to these levels, as the reasoning suggests, because we are still in an emergency mode.  There seems nothing so permanent as a temporary emergency mode implemented by a quasi government agency.

Loose money is supposed to increase employment.  We can see it increases stock prices, but its impact on employment is moot.

The question is then, "where would the market be if rates were free to find their own level?" Where would rates be if the Fed didn't lend money to the Treasury each week? Could this market handle a .5% rate increase?  What would that do to all the dividend capture programs long the market?

The Federal Reserve is in an unmanageable position, and some of the board members are acutely aware of the dangers.  To ease out or unwrap the Federal Reserve balance sheet would be a catastrophic awakening for the stock market.

The low rates have not only encouraged federal spending and borrowing, they have affected consumer behavior as well.  Consumer debt is on the rise, perhaps taking their cue from the government itself.

The Fed used to applaud high savings rates which would signal sound consumer financial condition.  Instead they have prompted a paycheck to paycheck, roll the credit card debt behavior.  People watch Washington and learn.