QE is creating a speculative stock bubble.

[I B Hankering]

Originally Posted by CuteOldGuy

Ignorant fools support that. You have no idea how stupid you are.

+1


Nobel Prize winner warns on US stock market bubble
by Dylan Lobo on Dec 02, 2013 at 09:59

"[Shiller] sees the US as one of the most overvalued markets in the world, saying its technology and financial sectors are among the most expensive. ‘I am most worried about the boom in the US stock market. Also because our economy is still weak and vulnerable,' he said."

http://citywire.co.uk/new-model-advi...vestments-list


"...repeated rounds of quantitative easing have fueled stock gains to the point where some economists say prices may no longer be reasonable."

http://money.cnn.com/2013/10/28/news...e-qe-stimulus/

[i'va biggen]

We had the tech bubble the housing bubble why not a stock bubble, it is capitalism.

[BJerk]

What's that guy selling - his investor letter? If you think the market is going to crash, sell your stocks. Oh, you don't have any? Start digging your cellar for doomsday supplies. QE2 definitely helps stocks. So, the market knows that and smart guys benefit from it. Losers don't realize the market has priced in the end point of QE2 for early next year, until some guy tells them what to think about it.

[I B Hankering]

Originally Posted by Bert Jones

What's that guy selling - his investor letter? If you think the market is going to crash, sell your stocks. Oh, you don't have any? Start digging your cellar for doomsday supplies. QE2 definitely helps stocks. So, the market knows that and smart guys benefit from it. Losers don't realize the market has priced in the end point of QE2 for early next year, until some guy tells them what to think about it.

There are two articles there by different authors, BJ, neither of whom you can substantively refute. They both say the same thing: U.S. investors are being manipulated into making risky investments because of the monetary policy adopted by the Fed, BJ.

[WTF]

Originally Posted by I B Hankering

There are two articles there by different authors, BJ, neither of whom you can substantively refute. They both say the same thing: U.S. investors are being manipulated into making risky investments because of the monetary policy adopted by the Fed, BJ.

There is no question about it being a bubble, the question is when, when, when. The monetary adopted by Volker ruined Carter and saved Reagan!

I been trying to tell folks to quit bitching and start investing smarter.

[I B Hankering]

Originally Posted by WTF

There is no question about it being a bubble, the question is when, when, when.

+1 Try telling that to BJ.

[WTF]

Originally Posted by I B Hankering

+1 Try telling that to BJ.

I think Bert knows it, he just doesn't think it is a bad thing.

[BJerk]

Originally Posted by WTF

I think Bert knows it, he just doesn't think it is a bad thing.

I think QE2 helps stocks, and there is always a bubble somewhere. Whether it is in Netflix (yep) Whole Foods Market (maybe a little) gold (yep) coal (nope) Tesla (yep) or Tulips, bubbles, just like the poor, we will always have with us. Invest in great companies for the long term, and you should do OK. Sit around on a SHMB and argue with people, perhaps your (and my) investments will suffer. Either way, QE2 is great for the American taxpayer.

[WTF]

Originally Posted by Bert Jones

, QE2 is great for the American taxpayer.

QE2 is great for some American taxpayers.

[CJ7]

Originally Posted by WTF

QE2 is great for some American taxpayers.

central bank magic.

[CJ7]

1. Quantitative Easing is printing money: Politicians, journalists and market participants often refer to quantitative easing as “printing money.” This is because when the Fed buys bonds from banks it does so by crediting those banks’ accounts at the Fed with reserves that didn’t exist before. But it’s misleading to call this process “money printing” because it doesn’t actually do anything to increase the amount of money in circulation. In fact, in our monetary system, most money is created by private banks and not the Federal Reserve. When a bank lends you money on your credit card, that’s “printing” money. When the government buys bonds from banks, it merely raises the price of that particular type of bond and lowers the interest rate. Lower interest rates might encourage consumers to take out loans, but it won’t actually lead to more money in the system unless banks create money through making loans. And banks won’t do that unless they identify profitable lending opportunities.
2. Quantitative Easing will eventually lead to inflation: For this reason the fears that quantitative easing will eventually lead to runaway inflation are unfounded. If the government literally began printing money and started mailing out new $100 bills to citizens, that would lead to price inflation. But quantitative easing isn’t the equivalent of mailing out $100 bills — it’s merely the managing of long-term interest rates much in the same way the Fed always has managed short-term interest rates. This is not to say that Fed policy can’t ever lead to inflation — keeping interest rates too low for too long can encourage the sort of spending that would cause prices to rise too quickly. But the idea that interest rates are too low right now doesn’t make a lot of sense given the large amount of slack in the economy as shown by high unemployment and stagnant wage growth.
3. Quantitative Easing is responsible for recent stock market highs: This also means that those who argue that recent stock market highs are the result of QE are wrong. Fed bond buying will cause bond prices to be higher and interest rates to be lower, and this will encourage investors to choose stocks over bonds at the margin. But no amount of federal bond buying is going to cause a particular stock to be a good buy if an investor doesn’t think that stock will provide a return. QE may boost profits by reducing the interest rates firms have to pay on their debt, but it’s not going to create profitable enterprises out of this air. A much more plausible reason for record stock prices is that corporate profits and profit margins are at all time highs.
So what’s the point then of QE and what effect has it had? By buying long-term government debt and mortgage bonds, the Fed lowers interest rates companies and consumers must pay to borrow money. On the margin, this will lead to a bit more investment and slightly higher stock and home prices. The theory is that by boosting wealth through these channels, consumers and businesses will be more confident and willing to spend. And the evidence says that QE has had a slightly positive effect on the economy. But though the press often refers to QE using terms like “massive” and “unprecedented,” it doesn’t mean that it is a particularly risky policy or one that deviates much from what the Fed normally does. And that’s why we shouldn’t get too worked up about its being wound down


Read more: Taper Tantrums: 3 Myths About Quantitative Easing | TIME.com http://business.time.com/2013/09/18/...#ixzz2mLXlWvKJ

[I B Hankering]

Originally Posted by CJ7

1. Quantitative Easing is printing money: Politicians, journalists and market participants often refer to quantitative easing as “printing money.” This is because when the Fed buys bonds from banks it does so by crediting those banks’ accounts at the Fed with reserves that didn’t exist before. But it’s misleading to call this process “money printing” because it doesn’t actually do anything to increase the amount of money in circulation. In fact, in our monetary system, most money is created by private banks and not the Federal Reserve. When a bank lends you money on your credit card, that’s “printing” money. When the government buys bonds from banks, it merely raises the price of that particular type of bond and lowers the interest rate. Lower interest rates might encourage consumers to take out loans, but it won’t actually lead to more money in the system unless banks create money through making loans. And banks won’t do that unless they identify profitable lending opportunities.
2. Quantitative Easing will eventually lead to inflation: For this reason the fears that quantitative easing will eventually lead to runaway inflation are unfounded. If the government literally began printing money and started mailing out new $100 bills to citizens, that would lead to price inflation. But quantitative easing isn’t the equivalent of mailing out $100 bills — it’s merely the managing of long-term interest rates much in the same way the Fed always has managed short-term interest rates. This is not to say that Fed policy can’t ever lead to inflation — keeping interest rates too low for too long can encourage the sort of spending that would cause prices to rise too quickly. But the idea that interest rates are too low right now doesn’t make a lot of sense given the large amount of slack in the economy as shown by high unemployment and stagnant wage growth.
3. Quantitative Easing is responsible for recent stock market highs: This also means that those who argue that recent stock market highs are the result of QE are wrong. Fed bond buying will cause bond prices to be higher and interest rates to be lower, and this will encourage investors to choose stocks over bonds at the margin. But no amount of federal bond buying is going to cause a particular stock to be a good buy if an investor doesn’t think that stock will provide a return. QE may boost profits by reducing the interest rates firms have to pay on their debt, but it’s not going to create profitable enterprises out of this air. A much more plausible reason for record stock prices is that corporate profits and profit margins are at all time highs.
So what’s the point then of QE and what effect has it had? By buying long-term government debt and mortgage bonds, the Fed lowers interest rates companies and consumers must pay to borrow money. On the margin, this will lead to a bit more investment and slightly higher stock and home prices. The theory is that by boosting wealth through these channels, consumers and businesses will be more confident and willing to spend. And the evidence says that QE has had a slightly positive effect on the economy. But though the press often refers to QE using terms like “massive” and “unprecedented,” it doesn’t mean that it is a particularly risky policy or one that deviates much from what the Fed normally does. And that’s why we shouldn’t get too worked up about its being wound down


Read more: Taper Tantrums: 3 Myths About Quantitative Easing | TIME.com http://business.time.com/2013/09/18/...#ixzz2mLXlWvKJ

"After Bernanke's QE Sent Stocks To Record Highs Will Fed Tapering Collapse The Market?"

"Stocks are firing on all cylinders as ultra-low rates fuel risk-taking, which could get dangerous is asset bubbles go out of control, Bernanke said." (May 2013)
http://www.forbes.com/sites/afonteve...se-the-market/


"...repeated rounds of quantitative easing have fueled stock gains to the point where some economists say prices may no longer be reasonable."
http://money.cnn.com/2013/10/28/news...e-qe-stimulus/


". . . persistent QE can lead to asset bubbles both where it is implemented and in countries where it spills over. Such bubbles can occur in equity markets, housing markets (Hong Kong, Singapore), commodity markets, bond markets (with talk of a bubble increasing in the United States, Germany, the United Kingdom, and Japan), and credit markets (where spreads in some emerging markets, and on high-yield and high-grade corporate debt, are narrowing excessively).

"Although QE may be justified by weak economic and growth fundamentals, keeping rates too low for too long can eventually feed such bubbles."
http://www.slate.com/articles/business/project_syndicate/2013/03/quantitative_easing_all_your_q uestions_answered.html


" . . . the easy money and low interest rates resulting from quantitative easing have been a shot in the arm to the economy, fueling the stock market and helping the housing recovery. On the negative side, The Fed accomplished QE by "printing money" to buy Treasurys, and through the massive power of its purchases drove interest rates to record lows."
http://www.cnbc.com/id/101062461


"The Fed's so-called quantitative easing policy, or QE, which is designed to push borrowing costs down to boost economic growth, has been in place for more than four years and has been credited for fueling a boom in the stock market."http://www.usatoday.com/story/money/...-high/2830409/

[CJ7]

IB, I feel somewhat generous today so I'll respond with a question..

since when did you start placing any merit on Bernanke's words ?

[I B Hankering]

Originally Posted by CJ7

IB, I feel somewhat generous today so I'll respond with a question..

since when did you start placing any merit on Bernanke's words ?

Bernanke was but one voice in seven articles -- including yours, CBJ7 -- that said the same thing, but maybe you're too ignorant to have noticed, CBJ7.

[CJ7]

Originally Posted by I B Hankering

Bernanke was but one voice in seven articles -- including yours, CBJ7 -- that said the same thing, but maybe you're too ignorant to have noticed, CBJ7.

as usual that's not what I ask you.

back to your rock