Former FDIC Chair: Stock Market 'Bubble' Fake

A former FDIC chairperson Sheila Bair (Obama Administration - 2009 - 2011) is now saying the recent stock market run up is somehow a "fake indicator" in regards to the overall economic conditions for the majority of Americans !

Apparently most of the run up is due to the Federal Reserve policy called quantitative easing and not so much any general improvements to the economy.

I am hoping someone can fully explain the whole QE thing and how it actually gets money into the stock markets.

Perhaps the false sense of "security" is based on many individuals who might be seeing artificially high numbers in their IRA and 401k accounts soon to be sliced and diced again as they were in 2008.

On Monday, the former chair of the Federal Deposit Insurance Corporation, Sheila Bair, who served under President Obama’s administration from January 2009 until June 2011, ripped into the so-called Obama recovery. Citing a chart from the Sentier Research Group, she wrote, “for a large number of American households, there has been no economic recovery.” .........

"short" story

some stories about QE

Is a BIG Crash on the Way Soon ?

The stock market tells us nothing about the financial health of America!

It is not the 401k plans that prop up and drive the market...its speculation and algo-trading. It's fake! A computer decides what action is best and no concern is paid to the actual investor, except those that run the comp systems. They get to trade and make decisions before we, the little people, can act on our investments. By then......it's too late.

QE has only allowed cheap money to flow to lenders that have no incentive to loan it to individuals and business' because there is very little interest paid on the loan. They would rather stick it in the market to profit that way, or they simply allow the Fed to keep the funds until they absolutely need it.

reply to post by xuenchen


I think the way quantitative easing works, is that it borrows money from present and future people and then converts it into liquid capital now that is then sent or spent on the only groups who already have lots of money in order to give them more to increase the power gap between classes. So, effectively, quantitative easing is a reverse "Robin Hood" scheme (scam) that steals from the less well off through inflation (currency dilution) and present/future public debt, and gives to the already sociopathic/psychopathic rich and criminal element in society.

The borrowed capital then gets placed into the stock market to provide a faux support system. As long as we believe it's real, it works.

Did I get that right?

Cheers - Dave

Pop that bubble already.

reply to post by xuenchen


There's been many articles lately comparing the 1929 crash to that of the market today via a chart




Not sure if there's any thing to it, but there sure are a lot of similarities
Guess we'll know in a few more months

reply to post by snarky412


Nice chart and it could be a real indicator !

Maybe a profit taking panic will start in 2014.

reply to post by xuenchen


It's why I've taken my funds out of the stock market and put into the bond market.

duh.. big duh. of course its fake.


The economy is like a game of monopoly where the winner (the REAL rich.. not the guy with a few 100k) already has all the property, houses and hotels, AND all the cash in the bank.. He still enjoys watching people land on his stuff that way he can charge them rent they don't have. The game keeps going ONLY because the guy winning has FORCED everyone to keep playing even though they have NOTHING LEFT.

The winner starts Xeroxing the monopoly money because he still wants his rent everytime someone rolls the dice.

The winner plays and WILL CONTINUE to play and FORCE everyone else to play because as long as the game goes, he is GUARANTEED to ALWAYS WIN.. with no CHANCE of LOSING>

Wow.. so basically the game HAS BEEN OVER for awhile now.. but the winners aren';t done playing Hayden Holder yet..

YEP... the ELites are Hayden Holders!

It's the whole hocus pocus "perception is reality" paradigm that the PPT and quantitative easing is following, here. .

Basically, the notion is that panic causes more harm than the reality of whatever situation we're in, so keep the perception that things are still well, in order to keep the panic-level of society down for as long as possible.

There are multiple problems with this thinking.

It's short sighted. You HAVE to address reality, at some point. Even if the losers in society are down and out, they still exist. Eventually they come out of their misery-filled houses, and riot.

Secondly, QE is simply hidden inflation. So the exact degree of artificial bounce up in the markets, is corrected by rising inflation in the coming quarters.


So it's retarded. The only way it makes sense, is to risk delaying the inevitable, to buy time to implement REAL changes, like developing new sectors for TRUE growth in an economy.

Does anyone see this coming to be?

NO!

So yea, it's keeping to the dream, erm... mass psychosis that is modern society afloat for a wee bit longer, is all.

beezzer
reply to post by xuenchen

 

It's why I've taken my funds out of the stock market and put into the bond market.

Good move and smart too.

I would say the bubble is real and is abort to burst. So many signs point that the stock market is about to take a nosedive.

Only time will tell. Probably a good time to invest in another currency besides the U$D.

xuenchen

beezzer
reply to post by xuenchen

 

It's why I've taken my funds out of the stock market and put into the bond market.

Good move and smart too.

My company matches 401k's up to 6%.

I want to invest, and was honest with my broker. I told him that QE scared me about investing in the stock market.

He actually agreed and recommended the bond market.

We ought to know by Jan 15th 2014 if this plays out like 1929. I have not much money so it won't personally affect me much but some of my friends will be cryin in their beers. I have been seriously considering a small investment opportunity, about $5,000.00 total outlay so I'm going to consider it a little more seriously.

With every major peak in the market a correction always follows, the only question is how big will the correction be? Could be a significant correction could be a minor correction, only time will tell, because the algo traders decide how much of a retrace is necessary at this point.

ETA: Silver back under $10 an ounce would be spectacular IMO.

You don't have to be an ex- FDIC chairperson to see this, anyone who has followed the reason for the fluxuation of the market for a while can see this. The Stock Market seems to be irrational beyond belief, making up things as it goes along. It is run by a bunch of people who think they run the economy and know they can punish the government if it interferes. I think the government ought to shut the whole thing down. Wallstreet is a runaway train, the same kind that caused the great depression. They must all be high on something

There's no way we can maintain tapering long term without a collapse. I think we'll see a return to QE, and probably in larger amounts than we've seen so far. This is an awful decision, but I think the Fed will do whatever it can to delay the inevitable as long as possible. As for the housing market, Qatar has been going crazy buying up real estate in the U.S. Maybe this has helped drive the illusion of a rising market?

A correction is certainly in order, and the longer we delay it the more severe it will be when it happens.

snarky412

There's been many articles lately comparing the 1929 crash to that of the market today via a chart

Like suggested.
Lots of charts.


Mike Grouchy

the currency has lost 97% of its value

Let me invert this number. This is the same thing as saying each dollar we have should be equal to 33.33 dollars of buying power, if there had been no inflation. [100 -97 = 03%] So where did the other 32.33 dollar go.

Well there are three times as many people in the USA as there were in 1913.

1913: 97,225,000

2010: 310,133,338

so lets adjust for the 3x population... I mean we don't want 2/3rds of the population walking around with access to zero dollars. How would they eat?

33.33 dollars divided by 3 = 11.11 dollars

So where did the other 10.11 dollars go.

Well here is a comparison of the GDPs from 1913 and 2009

1913: 39,100
2010: 14,237,200

14,237,200
/ 39,100
= 364.12

divided by the 3x population
364.12 / 3 = 121.37

In English that means our domestic product is 121 times more, per person, than it was in 1913. This means that we produce one hundred times as much, but our dollar has only had to be diluted by one tenth to cover all those purchases. Technically, and as allude too if not for oil, our dollar should be worth about ten cents this day. Has the quality of our product also gotten 10x better in value? Then a dollar should only be worth 1 cent.

The Federal Reserve has done better than any group in the HISTORY OF THE GODDAMN WORLD at keeping our currency valuable, while remaining liquid and flexible.






TLDR: People say that we are nearing the point where more than 50% of the population is riding in the cart, and not pulling the cart. In 1913 that would have been a problem. In the age of the AUTO-mobile, everyone can ride in the car. Get over it.

reply to post by xuenchen


From what i have heard quantitative easing in the US stock marked (or elsewhere) is done by lending free QE-money to a selection of stock registered companies. These money are in turn used to by these companies own stocks.

There are probably a clause in the ‘deal’ that prohibit these companies from selling these stocks afterwards as that would totally sink the bourses. It is probably also reasonable to believe that it is a selection of FED appointed group of people who does the actual buying on behalf of the fed and these selection of companies.

That’s how they pump up the stocks markeds. At least that’s how I have heard it. Perhaps someone can verify?