The bubble is speaking to us, says Jared Bernstein

Waiting for the Market’s Call to Reason.

Failing to raise the debt ceiling, however, is more than analogous to that systemic crash, and while markets appear to have priced in a last-minute agreement to avoid default — certainly that’s the lesson of recent history — one can see nervousness, both in equity markets and in the rising yields of shorter-term Treasuries.

What is the bubble saying exactly? The bubble that is talking is the last on in the series, that third spike. So, yes, the market has priced in QE infinity, that is why he thing spikes to high heaven. Today the bubble was off 1.2%, the bubble is telling us, 'thank you for the budget showdown, it gives me an excuse to rationalize prices'.