BERNANKE SPEAKS

Federal Reserve Chairman Ben Bernanke spoke before Congress today and the stock market listened, with home building and consumer stocks leading the way. Two stocks, Home Depot and Macy's, led the upswing.

Bernanke's testimony was laced with what the market apparently needed to hear. On the upcoming sequestration issue, he recommended the old kick-the-can technique, suggesting the heavy so-called front-loaded cuts due to take effect be slimmed over a longer period owing to its possible harmful impact on a still struggling economy.

So much for cold turkey. 

On inflation it was again more of the same: "Measures of longer-term inflation expectations have remained in the narrow ranged seen over the past several years. Against this backdrop, the Federal Open Market Committee anticipates that inflation over the medium term likely will run at or below its 2 percent objective."

Bernanke defended the Fed's bond buying spree saying any real risks were manageable. Why that's reassuring to anyone except those who seek to move the market for some quick profit is befuddling to say the least. Did anyone think about sequestration he was going to vault into the chamber and recommend taking the meat cleaver to the obscene national debt now?

And his blowing off high energy prices with an aside about its impact on recovery was first-rate bureaucrat-speak. At one point under some fairly direct questioning he bragged about keeping the inflation rate near the bogus 2% level better than any other Fed chairman. 

Advances lead declines on the NYSE 2:1 while on the NASDQ the ratio was 3 stocks up for every two down.

Despite what the market clearly saw as good news the S & P 500 failed to breach the 1,500 mark, closing at 1,496.64, raising the issue is the 1,500 level now a point of resistance rather than support as some hailed it until the recent downturn.

Time, as they say, may march on, but so does bureaucratic BS.