I know that it is very very dangerous to say "this time it's different" but ...... I think this time it is different. Bernanke was as clear as a Federal Reserve Chairman can be regarding targetting stock prices in this article: http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html?hpid=topnews
the only problem is Bernanke was not a single time right about anything in addition if oil goes above $100 Bernanke has huge chance to be fired not a single time in a history ' this time it's different' worked. the current formaula quite simple wealth effect -> overconsumption ->bust in case of housing it was 5 years now they are trying to repeat it with stocks ok, we might reach all time highs by the spring but it will be huge bust no matter what with a year Do you think Bernanke learns anything from his past mistakes? No so how can it be different
I have come to Elitetrader to announce the top is now in. We have topped. The next low will be in March of next year. I am putting my reputation on the line this post. The next recession will start in January. The recovery has ended.
they won't pull the rug, not yet. the way it works is they will wait until you bet your farm and go long. then they will pull the rug. there is nothing you can do really. you can try to be patient, fight your desire to place a trade but it is all useless. the great fake bull market will manage to tempt you. your best strategy is to let us know the moment you bet the farm. at least you will still have friends on ET after it is over.
Last time we had a stock market bubble was about 10 years ago. Does Bernanke think enough time has passed that people have forgotten about it... enough time that it will yet "work again"?
It could be different because I infer from the FOMC statement and WaPo article that the Fed will provide additional stimulus if stock prices fall by a noticeable amount. I am unaware of another example of a central bank, especially the US central bank, of publicly acknowledging their desire for higher stock prices, and trying to reach that objective through QE.
not to pick on your comment, ok, to pick on your comment (take with a grain of salt) we use "recognize" in America, generally those who speak English in other countries use "recognise"
Ok, US central bank publicly ackowledge they want house price to go up and they try to reach it with QE so what?
Yeah, I wouldn't put too much confidence in a "Bernanke put" either. Traders considered him a joke in 2008, along with non-Fed policies like "no shorting financial stocks for XX days," etc. Regardless of what policymakers think they can do, the market will find a way out and a way down eventually. I like to call this the Jurassic Market because chaos can slip through the smallest cracks and snowball into something no one is expecting. Bernanke's amusement park won't be amusing for too much longer.