Put, on.

It has been a one-two punch for moral hazard this week as the UK Treasury pressured the BOE into backstopping the reckless business practice of the media savvy managers of a third tier UK mortgage lender (a deposit taking hedge fund in any analysis) and the Bernanke Fed, after much ado about nothing socialized the equity markets with a put very generously struck at all time highs.

Global strategists are now calling for the mother of all rallies into next year as the rate cycle turns and growth projections for next year go from weighting recession probabilities to discounting that altogether more equity friendly concept "the mid-cycle slow down" whatever that is. US markets responded appropriately and Asian markets hyper-appropriately, while the dollar made new lows against most alternatives. Moral hazard indeed.

Whatever one calls it, the concept most on m*'s mind is not growth or hazard so much as store-of-value. As a long term dollar bear, m* has been living with a workable definition in a relative sense but the cave-in this week, though hardly surprising, is an eye-opening step towards the precipice. m* is forming the conviction, at something deeper than an intellectual level finally, that the idea in an absolute sense can not exist in our current (fiat) money world.

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