Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Ever since the Federal Reserve started printing money in the name of “quantitative easing” to pull us out of the last financial crisis, money has been cheap, and seemingly any American with a pulse and a credit line has been able to fake “rich” by bingeing on all sorts of indulgences — real estate (despite tighter lending standards), fancy watches and awesome gaming systems, to say nothing of the debt that corporations were racking up, which some market analysts think might be the biggest threat of all.
The problem is: The whole system is now running in reverse. The Fed has been hiking rates and spooking markets in order to stave off inflation and other potential ills. Is this an overdue fit of fiscal sanity, or the equivalent of taking away the punch bowl just as the party was getting started, then dumping it on our heads? -
I think they’ve nailed the problem pretty well. Very good article. I’ve felt for at least a couple years most equity markets were over-extended. But what do I know? (Not much). Since brief reference is made to 1929, I’ll submit this: While big trends do repeat (in economics as well as history), short-term moves (10-25 years out) are much harder to understand or predict.
Comments
The problem is: The whole system is now running in reverse. The Fed has been hiking rates and spooking markets in order to stave off inflation and other potential ills. Is this an overdue fit of fiscal sanity, or the equivalent of taking away the punch bowl just as the party was getting started, then dumping it on our heads?
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I think they’ve nailed the problem pretty well. Very good article. I’ve felt for at least a couple years most equity markets were over-extended. But what do I know? (Not much). Since brief reference is made to 1929, I’ll submit this: While big trends do repeat (in economics as well as history), short-term moves (10-25 years out) are much harder to understand or predict.