This title really says it all when it comes to the recent action in capital markets. Market excess is not hard to find in any part of the capital markets as they exist today: high yield, government bonds, equities, leveraged loans, etc.. But, when it comes to Central Banks, the phrase ” ask and yee shall receive” has never been more true. However, just like the great and wonderful Oz, it is important that markets not delve too deeply behind the curtain because such exploration would suggest that the benefits of Central Bank actions have mostly been psychological in nature, with very little proven outcomes to date. We understand the talking points quite well, nearly 5 years into this grand experiment, Low rates: boost corporate profits, equity prices, perceived consumer wealth, spur hiring, etc.. However, this experiment in yield curve support, has morphed into a feeling by all investors in all disparate parts of the capital markets that the man behind the curtain has things covered. We were blown away by a recent article in the NYT in which Bernanke (remarking on the possible bubbles in todays environment) stated ” Microsoft ‘s stock is worth well more than it was some time ago, and it could still prove to be a bubble” He chooses Microsoft as an example? It is interesting to note that he did not use the high yield market as an example, particularly since spreads over treasuries are below where we were pre-2008. The Fed is de-facto encouraging not only a reach for yield, but a completely reckless reach for yield. No doubt, this type of behavior always ends badly, however in this latest episode the blame (as it should be) will be placed squarely on the Fed. Their ability to, once again, “save the day” will be severely hampered under such a scenario. Forget the short term oriented deflationary chatter: BUY STUFF, SELL PAPER.