The bears are back in town

Is the stock market ripe for a double dip of its own? Investors increasingly think so:

The Yale School of Management since 1989 has asked wealthy individual investors monthly to give the “probability of a catastrophic stock market crash in the U.S. in the next six months.”

In the latest survey in December, almost 75 percent of respondents gave it at least a 10 percent chance of happening. That’s up from 68 percent who gave it a 10 percent probability last April, just before the events of May 6, 2010.

Fed Chairman Ben Bernanke has been — on purpose, mind you — keeping the markets propped up, hoping that a “wealth effect” created by rising values will get people spending money and goosing the economy. What the Fed is really doing is skewing perceptions and prices and distorting the market — all of which will go on quite happily, right up until it stops.

Keep in mind, the wealth effect is what had people taking out second mortgages on their overvalued homes, and we all know what happened when that bubble popped.

History does repeat itself, but I think by now we’re way past “farce.”