Stocks resumed their rally last week after Janet Yellen reassured investors that things are so bad she won’t raise interest rates any time soon. The Dow Jones Industrial Average (DIA) jumped 277 points, or 1.6%, to 17,792.75 while the S&P 500 (SPY) added 37 points, or 1.8%, on this idiotic “bad news is good news” scenario.

The Nasdaq Composite Index (QQQ) joined in the party, rising 3% to 4914.54 and could soon breach the meaningless 5000 level again as investors pour money back into the grossly overvalued FANGs.

The state of the world was characterized by the contrast between two articles in The Wall Street Journal last Wednesday, March 30. The first page of the newspaper featured an article discussing how institutions are pouring record amounts of money into venture capital funds.

But if readers turned to the first page of Section C, they read how Fidelity and other large mutual fund companies are marking down the value of their venture capital investments in social media companies such as Dropbox and Zenefits by as much as 40%.

We are in the final stages of an epic bubble inflated by the feckless policies of the Fed. And a lot of people (thanks to the equal incompetence of the institutions that manage their money) are going to lose a lot of money.

The Inexplicable Lure of Bad Ideas

Perhaps the fact that investors keep rewarding themselves with higher stock prices for the bad policies of the Fed and other global central banks is no different than voters thinking that electing an unprepared, and clearly temperamentally unsuited, man like Donald Trump to the Oval Office is a good idea.

The country already made a very similar mistake seven years ago, yet the American people seem eager to tempt fate once again. The good news – and this may be another reason why markets rallied this week – is that Mr. Trump’s circus act is finally starting to wear thin. A loss in Wisconsin this Tuesday will make it all but impossible for him to enter the Republican convention this summer with enough delegates to win the nomination on the first ballot.