You know you’re approaching max panic mode when the selloff in equity markets reaches the NYT Sunday style section. It absolutely is fascinating to watch the level of panic bordering on almost disgust. After an unceasing rise in the value of virtually every financial asset over the last 10 years, the general public (and professional money manager community) is aghast that in the midst of a relatively strong economy, real interest rates should normalize. I am now watching some commentary on Bloomberg TV discussing whether the rout in high yield will continue (there has not been a single high yield bond issued in December) and the general consensus among the panel is that the Fed is not paying enough attention to the “signals” that the market is giving them.I may be wrong, but the cause and effect used to go the other way, of course this was before the markets took the Fed stewardship of their health( no matter the level or excess) as a god given right. The basic misunderstanding is that markets do not equal the economy and in a post QE world this point is lost on most if not all market players.