Here’s one more piece of evidence that investors are going gaga for stocks (as if the 32 record closes for the S&P 500 this year, including on Monday, a Nasdaq Composite up 30% and fat valuations for unprofitable tech companies weren’t enough): Huge inflows into stock funds this year.
The wall of cash into U.S.-listed mutual funds and ETFs (including those that invest overseas) has hit $277 billion, and that’s with just over two months to go in the year, according to TrimTabs Investment Research. That’s the most for one year since $324 billion for all of 2000, which of course is the year the last tech bubble burst.
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So is this the evidence that the bears are approaching?
No guessing where all that money came from.
$80 billion a month of bond buying, what do you expect?
9 times out of ten financial engineering collapse are due to USA. USA is still the largest economy in the world. And most of us here are thinking surely QE will collapse one day.
And when it happens, are we ready?
Wait & see lol.
But some people think QE will go on "forever" if no currency can replace the US $ as Reserve currency.
Perhaps?
it sure looks like there's still room for a further run up...all the way to new year...
(30-10-2013, 12:46 PM)Temperament Wrote: [ -> ]9 times out of ten financial engineering collapse are due to USA. USA is still the largest economy in the world. And most of us here are thinking surely QE will collapse one day.
And when it happens, are we ready?
Wait & see lol.
But some people think QE will go on "forever" if no currency can replace the US $ as Reserve currency.
Perhaps?
I think the upcoming financial crisis is probably not due to the ending of QE, but could be the effect of continuous QE.
(30-10-2013, 05:49 PM)valuebuddies Wrote: [ -> ] (30-10-2013, 12:46 PM)Temperament Wrote: [ -> ]9 times out of ten financial engineering collapse are due to USA. USA is still the largest economy in the world. And most of us here are thinking surely QE will collapse one day.
And when it happens, are we ready?
Wait & see lol.
But some people think QE will go on "forever" if no currency can replace the US $ as Reserve currency.
Perhaps?
I think the upcoming financial crisis is probably not due to the ending of QE, but could be the effect of continuous QE.
According to the news they are delaying to tapering again because of jobs growth.
Ben Bernanke is concerned with jobs growth. Janet Yellen if she is elected seems to be concerned with wages growth instead.
During the Clinton and Bush years all the american jobs were exported to China and almost all the big companies doing manufacturing in America also moved to china so how are jobs and wages in America going to grow?
An excerpt from news report on Ben's decision...
Fed maintains strong stimulus as US growth stumbles
WASHINGTON — The United States Federal Reserve extended its support for a soft US economy yesterday (Oct 30), sounding a bit less optimistic about growth as it announced plans to keep buying US$85 billion (S$105.3 billion) in bonds per month.
In announcing the decision, the Fed nodded to weaker economic signals that have been due in part to a fiscal fight in Washington that shuttered much of the government for 16 days earlier this month.
The central bank noted that the recovery in the housing market had lost some steam and suggested some frustration at how slowly the labour market was healing.
However, it also dropped a phrase expressing concern about a run-up in borrowing costs, suggesting greater comfort with the current level of interest rates.
...
http://www.todayonline.com/business/fed-...h-stumbles
So the printing machine will be on for the time being ?
(31-10-2013, 09:58 AM)valueinvestor Wrote: [ -> ]So the printing machine will be on for the time being ?
doubt they will do something drastic over the coming Xmas+New year sessions - these are the periods where they really want consumers to spend.
Here's my analogy. Is like drug. You cannot take it off without side effects. The longer it gets the deeper the addiction goes. QE is now part of the new economic system for america. Maybe at the point of large inflation that it goes to cold turkey. We do not see that yet overthere.