The Stock Market Bubble

[KissMy]

Japan just printed triple the money as we did here in the USA on a percentage basis. Now their stock market just tanked 7%. They must be rushing to buy Gold because it has made a u-turn.

Lower yen will lower Japan export prices. The US profit margins will take a hit as cheap Japanese goods flood the markets. That will lower US stock earnings per share & stock prices.

Whats really scary is that the US dollar is now falling against the Japanese Yen. Their economy must be in serious recession grinding lending / money creation to a halt.

 

[AmazonTania]

Japan just printed triple the money as we did here in the USA on a percentage basis. Now their stock market just tanked 7%. They must be rushing to buy Gold because it has made a u-turn.

Lower yen will lower Japan export prices. The US profit margins will take a hit as cheap Japanese goods flood the markets. That will lower US stock earnings per share & stock prices.

Whats really scary is that the US dollar is now falling against the Japanese Yen. Their economy must be in serious recession grinding lending / money creation to a halt.

That's been going on for months, or since they started Abemonics in Japan.

 

[boedicca]

Yes. Once QE^Infinity ends and interest rates pop up, the stock market will correct.

 

[Toro]

High negative sentiment will likely limit the downside in the near-term.

Taper Questions Will Dominate

I added longs into the close.

 

[william the wie]

I doubt US sentiment is as important as what will happen in the BRICS. Inflation edging towards double digits and stocks selling at PEs of less than 5 are freaky.

 

[SteadyMercury]

Yes. Once QE^Infinity ends and interest rates pop up, the stock market will correct.

Correct to what? Where do you think it belongs?

I believe the effect of ending QE will be more an emotional one, with lots of it happening like yesterday where it will priced into the market before it even actually happens. Are you expecting something more drastic like a 10% or 20% drop? Are you making moves into another asset class in your portfolio?

 

[freedombecki]

Awww, too bad. The market was down today.

14,758.32

-353.87 -2.34%

MSN Money

 

[Sallow]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.

Wasn't that obvious to those in 2004 - 2007.

Sure it was.

 

[Sallow]

Yes. Once QE^Infinity ends and interest rates pop up, the stock market will correct.

Yep.

And it will probably go back up again.

 

[AmazonTania]

editec is right...identifying the bubble is obvious. Saying when it will pop is a whooooole other issue.

Wasn't that obvious to those in 2004 - 2007.

Sure it was.

It's always easier to claim what was 'obvious' nearly a decade after the fact.

 

[william the wie]

Wasn't that obvious to those in 2004 - 2007.

Sure it was.

It's always easier to claim what was 'obvious' nearly a decade after the fact.

It is the reason AIG pulled out of the CDS market in the spring of 2005.

 

[PhillyGuard]

The Federal Reserve keeps repeating the same cycle. Create a bubble with easy money, watch the bubble burst and cause widespread damage, attempt to repair damage with easy money, create the next bubble....

 

[Rozman]

I think it will be more then a pop.
More like a nuclear explosion.

 

[Rozman]

What happens when the Fed announces it's gonna pull the plug on
pumping money into the market.

The Dow loses 600 points in one day.

 

[Rozman]

The Libs blame the Republicans...
The WH blames Bush...
Chris Mathews apologizes once again on behalf of white people.

 

[OohPooPahDoo]

What happens when the Fed announces it's gonna pull the plug on
pumping money into the market.

The Dow loses 600 points in one day.

Big deal. The dow has DOUBLED since Obama took office. A 600 pt loss isn't going to kill anyone except the moronically over leveraged

 

[OohPooPahDoo]

High negative sentiment will likely limit the downside in the near-term.

Taper Questions Will Dominate

I added longs into the close.

Given the existence of put-call parity I'm having trouble figuring out why the put-call ratio matters.

 

[Toro]

High negative sentiment will likely limit the downside in the near-term.

Taper Questions Will Dominate

I added longs into the close.

Given the existence of put-call parity I'm having trouble figuring out why the put-call ratio matters.

It signifies excessive fear.

 

[AmazonTania]

Investors are generally optimistic that GDP will generally pick up in the third quarter of 2013. (or worst case as late as 2015) and that's what will drive 'real economy' earnings back from a comma, with QE tapering knocking up 28% of S&P 500 value off (2x on a 14x Fwd P/E).

 

[Animus]

ETFguide: Bond Losses at Federal Reserve Top $192 Billion