I watched on the news last night it was up over 15K. Is Obama going to take credit?
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I watched on the news last night it was up over 15K. Is Obama going to take credit?
What goes up must come down.
Quote:
How much longer can the Fed prop up stocks?
The Fed's zero-percent-interest-rate policy, dubbed "ZIRP," and its unprecedented bond-buying program, known as quantitative easing, or QE, is often cited as the major engine behind the market's 136% rise the past four years and its fast-and-furious 12% gain so far in 2013.
The Fed's policy playbook has driven interest rates and borrowing costs to record lows, which has spurred risk-taking, allowed consumers to get their finances back on track and enabled Corporate America to keep churning out profits. Super-low interest rates on cash and bonds have also made the stock market, which now sports a fatter dividend yield than the 10-year U.S. Treasury note, a far more attractive investment alternative relative to fixed income.
But how long can the Fed prop up the stock market? Likely for a good time longer. The Fed said Wednesday it would continue on its current path of buying $85 billion in Treasuries and mortgage-backed bonds each month until the unemployment situation improves substantially. For the first time the Fed also said it could increase the pace of bond purchases if inflation remains tame and the job and economic recovery sputters.
The market's rise is all due to the Fed's "smoke and mirrors," warns Richard Suttmeier, chief market strategist at ValuEngine.com. 'It's a mirage. It will end. You just don't know when." Fed sentiment will turn, he says, when companies start falling short on earnings projections on a consistent basis, signaling that the Fed's policies are not helping the economy heal fast enough.
http://www.usatoday.com/story/money/...tocks/2129787/
Helicopter Bernanke increasing the money supply like monetary heroin. The plan is for the economy to rebound, which it is. As some point they will slow monetary growth where real growth will carry the economy. Theoretically.