So let’s cut to the chase: The reason Pavlov Bernanke took away the punch bowl on Thursday and put markets into a tailspin, was because stocks are overheating and because his goofy printing operations have generated all kinds of risky behavior. Keep in mind, that it was Bernanke who said that he thought that goosing stock prices would create the “wealth effect” that would lead to a broader recovery in the real economy. Just as it was Bernanke who signaled that he would keep stocks from breaking lower. (The “Bernanke Put”). In other words, investors have just been following their Master’s lead, which is why they loaded up on stocks to begin with. And that’s why junk bond yields dropped to record lows. And that’s why margin debt climbed to record highs. And that’s why all the big corporations have been buying back their own shares hand over fist. And that’s why the financial markets are riddled with bubbles. It’s because Bernanke tacitly implied that he would support rising stock prices with lavish infusions of funny money NO MATTER WHAT.
full: http://www.counterpunch.org/2013/06/21/the-big-plunge-2/ _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
