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To: upbeat5

Dow at 15,000 now that’s inflation. It is a huge financial bubble.


2 posted on 08/26/2013 8:24:04 PM PDT by FlyingEagle
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To: FlyingEagle
Dow at 15,000 now that’s inflation. It is a huge financial bubble.

And a few missiles in Syria will be all it takes to make it pop.

4 posted on 08/26/2013 8:26:08 PM PDT by dfwgator
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To: FlyingEagle

Equities aren’t absurdly bid up.

Treasuries, on the other hand, are in the Godzilla-like monster of all bubbles. Anyone holding Treasury paper, especially from the belly of the curve outwards, it going to start catching hammer blows between the eyes.


5 posted on 08/26/2013 8:26:48 PM PDT by NVDave
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To: FlyingEagle; All
Dow at 15,000 now that’s inflation. It is a huge financial bubble.

As usual, the devil is in the details.

The DJIA is not a true index. When a stock performs poorly over time, it is removed and replaced by a faster growing company with better prospects. The same cannot be said for a company in the DJIA which is outperforming the market. That company is never removed and replaced until it underperforms. As such, the DJIA clearly has an upward bias built in.

In addition, it will ALWAYS go up because of the facts presented already....namely, when a stock performs poorly over time, it is removed and replaced by a faster growing company with better prospects. If this is the case, why is anyone surprised when the index sets records?
18 posted on 08/27/2013 4:14:54 AM PDT by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: FlyingEagle

Actually inflation and a stock market bubble are two completely different things. They might happen simultaneously, but evidence of an inflation does not come from a price or prices in one sector and prices going up in all sectors is not evidence of a bubble.

Additionally, the worry about excess bank reserves was not an issue in the run up to the start of the 1930s. Rather the worry about excess reserves then as apparently now was a wrong headed worry well into the contraction. In the 1930s it was 1937-38 and this caused the FED to make a policy error that led to the 1937-38 follow on recession.

Hopefully we have learned and will not worry about inflation because of excess reserves now and cause a follow on recession this time around. And keep in mind that in the 1937, the FED was not paying interest on reserves at the FED.


19 posted on 08/27/2013 6:14:32 AM PDT by JLS
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