Compulsions can be hard to resist
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Fed faith is not an investment strategy
An insightful article in the FT today courtesy of John Hussman (see The Myths behind the current stock market bubble) considers the belief system widely held today that central bank liquidity can support extreme and irrational asset valuations indefinitely: “Years of intervention have cast central banks as tools of self-reinforcing speculation. Mere phrases such as “Fed support” now suffice as complete investment strategies.” While today is certainly not the first time that this misplaced faith has been widely held, the current episode is so extreme that only 2000 and 1929 offer a comparable data set: In ... (full story)