Whenever markets reach new highs, it is inevitable that people begin to ponder if this is a top or even worse, a bubble. This led the WSJ to ask famed investor Jeremy Grantham point blank, “Is the US market in a bubble or is it different this time?” His response is certainly worth a few minutes of your time.
Is there value in the Chinese stock market or is it a dangerous bubble?
The last couple of weeks have been dominated by two topics: Greece and China. Last week we tackled what a Greek default means to your investment portfolio. This week we give our insight on the Chinese market which has tumbled in the last month. At Runnymede, we want to give our readers a different perspective than the alarmist headlines from other news sources. Unfortunately with internet news, they are paid on clicks so it's reliant on attention grabbing headlines, not necessarily the reality. We don't simply rehash what the mainstream news reports on. We look deeper beneath the surface to help you make informed investment decisions.
Show Me the Money: Where did the Fed’s QE money go?
Most people believe that when the stock market is going up, the economy must be doing well. The argument was generally true in the 20th century. Now a days, things are different in the era of the New Normal. So far in the 21st century, when both the bond and stock markets are cheering, the economy may actually be slowing or operating below trend.
Don’t Let Market Bubbles Hurt Your Portfolio
The guitar has always been abused with distortion units and funny sorts of effects, but when you don't do that and just let the genuine sound come through, there's a whole magic there.
– Jeff Beck
Larry Summers and Keynesians love bubbles
The market is eagerly awaiting the last FOMC meeting of 2013. Will they taper or not taper? I highly doubt that Ben Bernanke will be the Grinch and choose to taper in his last Fed meeting. However even if he does, it is a few months overdue.
Larry Summers was President Obama's favorite to replace Fed Chairman Ben Bernanke. Even though Summers ended up bowing out, it is important to listen to his recent IMF Research Conference speech because his Keynesian view is very much in line with incoming Fed Chair Janet Yellen, ECB President Mario Draghi and Japan's Shinzo Abe. The simple conclusion is easy monetary policy, quantitative easing and zero interest rate policy will likely be with us for a very long time. Bubbles, crashes and more bubbles are going to be our future. This type of environment is going to be especially rough for traditional buy and hold investors.