A few weeks before the election, I speculated that a potential election threat to the Democrats was a significant correction to the stock market.  The main reason for the speculation was the impending cessation of QE3, the Fed’s monetary stimulus program.  Pretty much all market observers believe the Fed’s stimulus has at least contributed to the significant stock index accumulation, and indeed, in more candid but also more opaque (to the non-economist) comments Mr. Bernanke would say the purpose of QE3 was to “stimulate aggregate demand through the wealth effect.”

“This is a Main Street policy,” Bernanke said at a Sept. 13 press conference after the Fed announced QE3. “Many people own stocks directly or indirectly. The issue here is whether or not improving asset prices generally will make people more willing to spend.”

Translation:  We’re going to make those in the stock market rich by pumping up the indexes, and then they’ll go out and buy an SUV!

Nevertheless, the end of QE3 hasn’t caused a problem–yet.  So why not?  I would argue the main reason is that other central banks have picked up the slack.  The Bank of Japan began saving the day, when at the end of October:

BOJ’s board voted 5-4 to accelerate purchases of Japanese government bonds so that its holdings increase at an annual pace of 80 trillion yen ($723.4 billion), up by 30 trillion yen.

The European Central Bank (ECB) also continues to talk about up to a $1T increase in its portfolio, with its head Mario Draghi continuing to fight the Germans for more stimulus.

And today markets are feeling juicy.  Why?  Well the Chinese are jumping into the monetary stimulus pool, with a surprise rate cut.  So I would argue our economy–at least as represented by the stock market–is still addicted to easy money.  While domestic QE has wound down, we are still nowhere near tightening to a normal monetary policy.  And central banks around the world are providing global liquidity to keep the markets up.  In a global financial system, while the Fed may be the big gorilla, they are not the only game in town.