Is Ben Bernanke an Idiot, Dumb, & Ignorant?

[thalestrader 14]

  Ingot54 said:

...And ... let's hope the recovery gets strong legs from here on - we deserve it after the past 5 years of :bang head:

 

(See next post)

 

The recovery here in the states has been far more robust than the aveage joe will acknowledge. The Fed has done its job. Unfortunately, an unintended, though predictable side-effect of its actions will be to go too far on the side of inflation, which causes it to put on the brakes, which causes recessions and depressions.

 

The creation of central banking did not repeal the business cycle. What it did do is made the business cycle a fairly regular, and hence somewhat more preictable than it had historically been prior to 1913.

 

It also caused price inflation. Whereas prices through human history had been fairly stable for hundreds and even thousands of years, prices since the advent of central banking have taken on a staggering, yet regular, projectory.

 

At any rate, the current recovery is likely nearing the end of its run. The next recession is perhaps even already quietly taking hold beneath the surface. However, the market will likely continue higher from here, with a top in the SP-500 coming somewhere between 1550-1800. We will probably see one or two 3-5% corrections along the way, perhaps one 9-13% correction, and then the top. We will then have your bear market, which will likely reduce the SP-500's market cap by 40-50%. Depending upon the actual high, that would project a bear market low somewhere between 750 and 1000.

 

Along the way, price will tell you everything you need to know. But if you want a fundamental edge, I suggest you pay attention to what the Fed tells us it is doing with its money, how much money it is deploying, and then compare that to what the market does. Money moves the markets. And X dolars will usually move the market y%. It sure helps your TA if you have a real money reason supporting price action at a given point in time.

 

Best Wishes,

 

Thales

[MightyMouse 12]

  thalestrader said:

 

At any rate, the current recovery is likely nearing the end of its run. The next recession is perhaps even already quietly taking hold beneath the surface. However, the market will likely continue higher from here, with a top in the SP-500 coming somewhere between 1550-1800. We will probably see one or two 3-5% corrections along the way, perhaps one 9-13% correction, and then the top. We will then have your bear market, which will likely reduce the SP-500's market cap by 40-50%. Depending upon the actual high, that would project a bear market low somewhere between 750 and 1000.

 

 

The fed has done a great job at creating equity and, hence, wealth. Expansion hasn't really occurred yet. I am expecting at least another 4-5 years before this run peters out. Yes, corrections, dips, and trips. But 2500-3000 in the S&P is very possible given the unprecedented amount of money that has been put out there.

 

At this point the fed is projecting current policy to remain the same until 2015. No reason to doubt it. a 25% to 50% rise in that time is totally possible.

[DbPhoenix 42]

  Ingot54 said:

No one knows what the market will do next - we just trade what we see.

 

Sound advice as far as it goes, but of little benefit if one is looking at the wrong thing.

[thalestrader 14]

  MightyMouse said:

The fed has done a great job at creating equity and, hence, wealth. Expansion hasn't really occurred yet. I am expecting at least another 4-5 years before this run peters out. Yes, corrections, dips, and trips. But 2500-3000 in the S&P is very possible given the unprecedented amount of money that has been put out there.

 

At this point the fed is projecting current policy to remain the same until 2015. No reason to doubt it. a 25% to 50% rise in that time is totally possible.

 

I would not be surprised by such a rise and within the timeframe you propose, MM. I think we could go 2500-3000 without anything more than 3-13% pullbacks through 2016; but I do think it is more likely that we get a bear market that wipes out 40-50% of market cap first, and then we reach the levels you propose (and possibly all within the time fame you project).

 

In the end, it does not matter which is right. If your scenario plays out, I will be quite content staying long. If my scenario plays out, I will be just as content to play the short side and then switch again when the inevitable bull rises again.

 

At any rate, if you go back to my previous posts in this thread from November, you will see that you and I are in fairly strong agreement as tothe role an effect of Fed liquidity programs on the overall trend in stock prices.

 

Best Wishes,

 

Thales

[Cory2679 11]

Stan Druckenmiller: "It's Going To End Very Badly" (Interest Rate Manipulation) - Stan Druckenmiller: "It's Going To End Very Badly" (Interest Rate Manipulation)

[Seeker 11]

This policy of debt and printing is good or bad depending on your time horizon. If you only have 10 years to live, then you'd want the government to continue borrowing and mismanaging taxes so that you can continue to have a nice life. If you're two years old, this mismanagement might be a bit more concerning. But that's why 2 year old don't get to vote

 

People like to criticise how the Fed, Bank of England, Governments etc run up these massive debts and print money. But a lot of these people are deep down pleased that their life isn't changing that much, because they don't want change, and want it to be someone else's problem.

 

In short is Bernanke an idiot? No, he's highly educated. Is he/was he doing the wrong thing? Long term, definitely. Short term probably not.

[laurus12 10]

Hello Ingot54,

 

Big time thanks for making me aware of The Daily Bell website! (post back on November 18th, 2012) I read the articles whenever I have the time. Really good stuff for thought. I believe it is important read for all of us no matter which country one are living in around the world.

 

Laurus

[SIUYA 11]

for an interesting take on the Fed and Bernake.....from a trading perspective

 

Brad DeLong : Moby Ben, or, The Washington Super-Whale: Hedge Fundies, the Federal Reserve, and Bernanke-Hatred

[SIUYA 11]

some interesting history for those so inclined.....

Bernanke?s Recession-Fighting Weapon Developed by 1900s Banker - Bloomberg