Tags: federal reserve | stock market | bubble | investors

Fed Won't Let Stock Bubble Pop in Election Year

Fed Won't Let Stock Bubble Pop in Election Year

By    |   Wednesday, 23 September 2015 07:48 AM

The Dow dropped 180 points, which was an improvement from the lows of yet another triple-digit day.

This is new-normal volatility.

The reason this writer thinks this market is headed for a bailout is based on the theory that the Treasury and Fed have sponsored this bubble and cannot allow it to burst, especially in an election year, and they have already demonstrated that they believe the government should intervene and manage the Commanding Heights of the economy.

Peter Schiff, of Euro Pacific Capital, told CNBCs twice-weekly Futures Now streaming video program that he never thought Fed Chair Janet Yellen was going to hike interest rates.

He declares, “We are stuck at zero, this is a gigantic bubble. The last thing the Fed wants to do is prick it, but the air is coming out by itself. Just keeping rates at zero is not enough to support this market.”

Next, Art Cashin, of UBS, describes for Bob Pisani an “ugly” market tone set by reports of “a great deflationary wave” in commodities as well as a scandal in Europe involving Volkswagen.

Mark Todd, of National Australia Bank, talks with Susan Li about the market’s anxiety over the Fed’s continued postponement of a rate hike and the possibility of a “credit event.”

Looking at the 20th triple-digit move in the last 24 sessions, Keith Bliss, Senior VP at Cuttone & Co., tells Bill Griffeth and Kelly Edwards that a global recession “is a real concern.”

Peter Costa, President of Empire Executions, is looking ahead to the next earnings season.

And Ken Moraif, of Money Matters, says his firm told clients a month ago to “get out of the market.” Rick Santelli calls the markets “overfunded” by Fed ease, and warns, “The air is coming out of the balloon.”

In light of Santelli’s words about “overfunding,” Dick Bove’s defense of Bank of America to Melissa Lee could be ironic. Bove then expresses concern about the ability of Goldman Sachs to implement successfully a number of changes it has planned for its business model.

Finally, in contrast to Bove’s inveterate bullishness, CLSA Bank Analyst Mike Mayo skewers B of A’s board for holding a 14-minute meeting with no goals, no food, and no water, and he maintains his sell rating. Perhaps a new indicator has been born.

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Robert-Feinberg
The Dow dropped 180 points, which was an improvement from the lows of yet another triple-digit day.
federal reserve, stock market, bubble, investors
385
2015-48-23
Wednesday, 23 September 2015 07:48 AM
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