“U.S. stocks have already risen 21.5 percent this year, which the newspaper compared to the 2013 run-up in Japan’s stock market, a country where the central bank has been even more accommodating than here, and Greek debt. “If the Fed declined to even slightly back off from its current policies in September, when the stock market reached record highs, it clearly has no intention of doing so any time soon,” the Times predicted. Wall Street’s earnings estimates for the current quarter are beneath the second quarter’s actual results, and average earnings per share for the S&P 500 have dropped from more than $30 to less than $27, JPMorgan data showed. During the same time period of diminishing results, the S&P 500 has ascended more than 10 percent. Moreover, net margin debt has hit an all-time high, the Times noted, even while highly leveraged, i.e. overpriced, stocks are outperforming the broad market. “Both of these data points serve to underscore that Fed policy is less about investment than speculation, built on the quicksand of leverage,” the Times declared. “The events of the past two months give more ammunition to those who contend that the Fed can never taper and that to hedge bullish positions is just foolish.””
Posted on: Sat, 26 Oct 2013 09:24:43 +0000
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