This week’s Chart of the Week comes from Jesse Felder, a very astute investor. I’ve posted charts like this in the past, illustrating the effects of the Fed’s Quantitative Easing on asset markets, but it’s worth revisiting after the former head of the Dallas Federal Reserve branch, Richard Fisher, openly stated that the main goal of QE was to purposely inflate asset values. Funny how open and honest people are once they’re no longer in their official position of portraying false confidence. The risk of asset prices manipulated higher than they would/should be based on the fundamentals is the potential reset. See the full post here.
There are also some really great articles worth reading that didn’t necessarily contain charts to post:
Is another financial crisis on the horizon? Michael Burry, real life market genius from the movie The Big Short, thinks another financial crisis is looming.
Central Bank activism and buying of stocks: Bank of Japan becomes activist investor by ramping-up additional equity ETF purchases.
Some things to consider when investing in index funds/ETF’s: Are Index Funds hurting the economy?
And lastly, with Wall Street out in full force with their 2016 predictions, may I suggest you take a look “behind the curtain” of Wall Street’s ridiculousness (*cough* uselessness) for a very interesting story of ex-Bear Stearns CEO telling the courts that the bank’s forecasts are for entertainment purposes
-Nick
I have read dozens of articles and listened to numerous talking heads regarding QE, but that chart clearly shows the bull market has not been based on fundamentals. Basically, the Fed was making us irrationally exuberant.