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Is the stock market over heating?
Comments
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Glen_Clark wrote: »exact effect maybe, but pretty obvious every new wave of money printing raises asset prices.
... and interest free loans on £600k sub prime mortgages will increase house prices
The question is will these measures ever be reversed? At least over a short term or just be allowed to be rolled over into the next economic fix?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
gadgetmind wrote: »That it caused the equity bull market that it did (if in fact it was QE that did this!) came as a surprise to everyone
.. not a surprise to you surely, as you tell us you were piling into shares in 2009?
I would have thought it fairly obvious that printing money to buy their own bonds would lower interest rates which would increase share prices and lower the value of the currency. Certainly the BoE shifted their own staff pension fund into index linked bonds before they cranked up the printing presses.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
I suspect the stock market represents the fortunes of the richest 10% who haven't suffered any recession and are looking forward to ever greater excesses. Remember most people possess few direct stock market savings.
It would be interesting to know the numbers.
A lot of people, possibly the majority, have money in the stock market through their pensions but how many have S&S ISAs is an interesting question.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Glen_Clark wrote: ».. not a surprise to you surely, as you tell us you were piling into shares in 2009?
I was also piling into shares but had no knowledge or concept of what QE would do to prices. All I thought as someone who tends to be a contrarian was that the market was very cheap and a good time to invest.Remember the saying: if it looks too good to be true it almost certainly is.0 -
It would be interesting to know the numbers.
A lot of people, possibly the majority, have money in the stock market through their pensions but how many have S&S ISAs is an interesting question.
From memory it is only about 20% of people in the UK who have dabbled in shares. In the US and Australia it is far more popular, about 50% of the population.0 -
Everyone has to make a judgement based upon attitude to risk.
It is always possible (maybe likely!) that the Eurozone is in for a really major shock.
Let's also not forget what could happen if there were another MAJOR terrorist attack.
Yes, markets tend to recover but it can take a long time...
On the other hand where would you put the money at the moment.0 -
From memory it is only about 20% of people in the UK who have dabbled in shares. In the US and Australia it is far more popular, about 50% of the population.
This is quite true. Many grandparents buy premium bonds for the grandkids. My Grandfather in the USA bought me shares (in Bank of America among others).0 -
Mervyn King said they would.grizzly1911 wrote: »The question is will these measures ever be reversed?
So its a pretty safe bet they won't.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Central banks are controlled by powerful private interests through holding companies and secretive boards. The process will be reversed when those private interests see a big enough profit to be made.
The big question no one seems to want to ask or answer is what exactly central banks are buying with all this counterfeit currency being funnelled into private pockets, we're told it's "gilts" but I think most people know it's far more likely to be toxic derivative junk when the final calculations are done.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
gadgetmind wrote: »Of course, it could all crash at any moment! I'm sure those who call it just before the crash will be seen as wise soothsayers, and people will forget all the dozens of times they said it would happen yet it didn't.
It wont crash, the reason is you need to also be saying the value of ____ will rapidly rise. Stock value cant disappear absolutely, people sell to save their money right and they store this value where?
What is this thing you see subject to a rapid rise. Most people say interest rates, cash. Sterling will one day be worth alot more, stocks will crash (the rate of change favours cash over stocks or company profits in some year)
But interest rates cant rise till we can afford to pay the bill on our debt. Also even if we did raise rates, this screws up QE.
If BOE buys 400bn with a rate of 3 % and the base rate is 5%. They are losing masses of money, those bonds are worth much less.
BOE is backer of cash value, what do bonds pay, BOE notes. It means sterling is not going to rise in value until we at least pay back the debt.
A great big crash is not in stocks but currency, we sell stocks in that currency so inversely they rise
20% down might happen, I hope it does. I dont see any big crash till we have a real threat occur that exceeds QE damage0
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