Rosenberg: ‘this is about speculative investing based on Bernanke liquidity principles’

From David Rosenberg’s Breakfast with Dave missive:

Dallas Fed President Fisher, who is an FOMC voter this year, told Bloomberg News yesterday that there is not going to be any more stimulus after June. This is going to leave Mr. Market in a bit of a quandary because based on our analysis, there has been an 86% correlation between the S&P 500 and the moves in the Fed balance sheet over the past two years. They never taught us that in the Graham-Dodd texts but, hey, this is about speculative investing based on Bernanke liquidity principles.

As I said when demonstrating stocks aren’t cheap:

When the Fed stops its quantitative easing program in June, we will see what kind of legs the economy and stock market really have.

Even if stocks aren’t cheap, that doesn’t mean they can’t go higher. But if Dick Fisher is right that QE3 is not going to happen, at a minimum, we will certainly get to see if the rally in shares has been Fed-induced.

Fisher video below.