The stock market will crash soon

[Dorkazoid_Jones]

The stock market is going up not based on fundamentals, but on the FED printing money hand over fist to try and revive the economy. I don't blame the FED for trying to revive a bad economy, but they have now printed so much money there is a huge stock market bubble. THere is no other place for fixed income investors to put their money so they are putting it in high dividend stocks. Small investors are now piling into the market at the very time they should be pulling out. If the 2000 stock market bubble was bad, it's going to look like a picnic compared to the bubble bursting this time because at least back then, the unemployment rate was low. Clinton handed Bush a mess and the Fed had to juice the markets back then and that created a housing bubble and then Bush handed Obama a mess and now the FED is juicing the markets even more. This is not going to end well. When you lose your ass in this latest bubble please don't blame the rich. The bubble is obvious to anyone who is honest with themselves. Take your profits and go to cash. And yeah Warren Buffett says it's time to buy, but frankly the man has just simply lost it. He's supposed to be Mr. Fundamentals. What fundamentals?? Sadly the economy hasn't improved at all in four years. To make matters worse, Keynesian economics generally don't work or even make any sense. It didn't work in Japan, it didn't work here during the great depression and it's not going to work now. You can be as partisan as you want here, but hopefully privately you're smart enough to know the market is not the place to be during a bubble...

 

[g5000]

I do believe much of the equities market is overvalued, but it has fuck-all to do with the Fed. That is just sheer gibberish being repeated by ignoramuses.

The Fed is responsible for the ginormous bond bubble we are in, not for overvaluations in the stock market.

I don't believe the stock market will crash first. The bond market will, and that will lead to an equities crash.

And then there is always the unresolved Euro crash which can whack us from left field.

Lots to keep an eye on.

 

[OKTexas]

Yep with the Fed pumping in 43 billion a month I don't look for a crash soon, but when it happens it will be bad.

 

[waltky]

Investor sentiment has been boosted by a range of factors in recent weeks...

What is driving the global stock market rally?
7 March 2013 - Stock markets across the globe have been on the upswing. In recent days, New York's main Dow Jones share index hit a record high.

In London, the FTSE 100 touched its highest level in five years. Meanwhile in Asia, the main indexes in Japan and Australia hit their highest levels since 2008, this week. This means that major stock markets across the world are inching towards levels not seen since the global financial crisis.

What is driving this rally?

It is a combination of factors, but the biggest one has been the aggressive stimulus programmes undertaken by various central banks. The US Federal Reserve, the European Central Bank (ECB), the Bank of England (BOE) and the Bank of Japan (BOJ) have all taken aggressive measures to try to spur growth in their economies. These policies have pumped trillions of dollars of new money into the financial markets. At the same time, they have also driven down the down the returns on government debt, making other assets, such as shares, more attractive. And with interest rates being at near historic lows in most leading economies, investors have been looking increasingly towards the stock markets. "There is a lot of money sloshing around in the world right now and there are not many instruments that are giving a good return," says Jeffrey Halley, of Saxo Capital Markets.

Will this money supply continue?

Well, maybe not forever, but in the medium term, yes. Earlier this week, the US Federal Reserve officials gave assurances that they would press on with the central bank's quantitative easing (QE) programme, in which it spends $85bn (£56bn) a month on buying bonds. Many analysts are of the opinion that the Fed will continue with the programme till the US economy sees sustained economic growth and the unemployment rate comes down significantly. Meanwhile, Japan's central bank, the BOJ, is facing increasing pressure from the country's newly elected government to take further measures to revive its sluggish economy. A key part of BOJ's policy stance has been the setting of a 2% inflation rate target. Japan has been fighting deflation, or falling consumer prices, for the best part of the past two decades. It has been a big hurdle to its attempts to stoke domestic consumption.

The newly elected Japanese prime minister has even suggested that the BOJ print an unlimited amount of yen to try to stoke inflation in the country. The idea being that with more money being pumped into the system, consumers will have more cash to spend and that will help drive up consumption and consumer prices. Analysts say given the state of the US and Japanese economies, the two central banks, which have been among the most aggressive, are likely to continue with their stimulus measures. "The Fed wants to achieve 6.5% unemployment rate and the BOJ wants to see 2% inflation," says P K Basu, regional head research and economics at Maybank Kim Eng. "Those two targets are unlikely to be met this year, so we will continue to see the central banks stick to their policies."

Is it just the cash?