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Well, this chart focuses on tech but Robert Schiller also thinks the overall market is bubbly. I'm amazed that interest rates could have been held down so long

Well, this chart focuses on tech but Robert Schiller also thinks the overall market is bubbly. I'm amazed that interest rates could have been held down so long and this is the real danger: how the heck can they ever normalize? If they do it will wreck havoc so the fed is trapped between the proverbial rock & hard thingy. Lo interest also hurts older people who rely on savings (But theyre not going to be here long anyhow...but Peter Schiff argues savings is the only real form of investment ) Bottom line is interest rates can only be held low because alternatives around the world don't exist. I'm also amazed how alot of people think the fed saved the economy & created more wealth : as Jim Rogers says they only know how to print). Finally, I think the derivatives were around 600bill upto Lehman downfall. I was astonished to find that they're now a quadrillion! Buffet called derivatives financial weapons of mass destruction. I think this world might experience this interesting concept. http://www.pinnacledigest.com/blog/dscaroknight/chart-below-illustrates-massive-tech-bubble-one-astounding-chart-created-sentiment http://www.pinnacledigest.com/blog/dscaroknight/chart-below-...

hnnewguy 12y ago
>If they do it will wreck havoc No they won't. Rates don't magically rise in a vacuum; rising rates coincide with improved economic conditions or rising inflation. Or, most likely, both. The Fed Board of Governors, unanimously, predicts interest rates of ~4% beyond 2016[0]. They certainly are not infallible, but they have the tools and the mandate to get there. Do you claim the market isn't pricing this in already? >Lo interest also hurts older people who rely on savings If anyone is to blame for the financial wrongdoings and shenanigans of the past 20 years, it's these same old people. I'm not terribly sympathetic. Besides, no one has ever said you're entitled to a magic return on your cash for glorified mattress-stuffing (savings account). This is a capitalist society, put your capital to work. >I was astonished to find that they're now a quadrillion! Notional value. [0]http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20140319.pdf http://www.federalreserve.gov/monetarypolicy/files/fomcprojt...
- mactitan 12y ago
  When the fed raised rates the last time ,stepwise & slowly it didn't work as planned and I think they're going tohave a helluva time normalizing. 2)Keeping savings is putting money to work . (sure I'd rather be a VC) I just believe Peter schiff on this. That notional value didn't help AIG. The pt. Is that nothings changed in the financial system. 1 quad means things are riskier than ever.
  - hnnewguy 12y ago
    >When the fed raised rates the last time ,stepwise & slowly it didn't work as planned You mean how when they raised rates in part to prick the housing bubble? How did it not work "as planned"? When the economy heats up and inflation is a risk, rates will rise. This is the business cycle. >I just believe Peter schiff on this. Being as how he's been wrong on just about every public prediction he's made, and his hedge fund gets crushed both during the crisis (which he "predicted") and since, I think you'd do better to expand the borders of your economic prognosticators.
    - mactitan 12y ago
      Well my 1st expansion was looking at the bandwagon of ( Rogers, faber, schiff,...) I was about to invest at the peak of dot com but reading them kept me out Didn't buy during house bubble- I was wary of what this group was saying - but I couldn't convince my condo flipping acquaintances - my chicken little perception faded a bit. I do notice that it's very hard for analysts to be flexible , thus titles like perma bear/bull...
  - inthewoods 12y ago
    "The pt. Is that nothings changed in the financial system" Actually, a ton has changed in the financial system - some good and some bad. Banks are larger than ever (bad - more potential systemic risk), but they're being more strictly regulated (probably better). Mortgage rules now exist that didn't exist in the housing bubble (generally good) - but Fannie and Freddie are the only game in town. Our bailout of Fannie/Freddie has now paid back the invested capital. And we haven't hit the hyperinflation that Peter Schiff and other similarly ill-informed pundits said would happen. The notional value of the derivatives contracts says nothing about the risk - just total exposure.

hnnewguy 12y ago

>If they do it will wreck havoc No they won't. Rates don't magically rise in a vacuum; rising rates coincide with improved economic conditions or rising inflation. Or, most likely, both. The Fed Board of Governors, unanimously, predicts interest rates of ~4% beyond 2016[0]. They certainly are not infallible, but they have the tools and the mandate to get there. Do you claim the market isn't pricing this in already? >Lo interest also hurts older people who rely on savings If anyone is to blame for the financial wrongdoings and shenanigans of the past 20 years, it's these same old people. I'm not terribly sympathetic. Besides, no one has ever said you're entitled to a magic return on your cash for glorified mattress-stuffing (savings account). This is a capitalist society, put your capital to work. >I was astonished to find that they're now a quadrillion! Notional value. [0]http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20140319.pdf http://www.federalreserve.gov/monetarypolicy/files/fomcprojt...

mactitan 12y ago
When the fed raised rates the last time ,stepwise & slowly it didn't work as planned and I think they're going tohave a helluva time normalizing. 2)Keeping savings is putting money to work . (sure I'd rather be a VC) I just believe Peter schiff on this. That notional value didn't help AIG. The pt. Is that nothings changed in the financial system. 1 quad means things are riskier than ever.
- hnnewguy 12y ago
  >When the fed raised rates the last time ,stepwise & slowly it didn't work as planned You mean how when they raised rates in part to prick the housing bubble? How did it not work "as planned"? When the economy heats up and inflation is a risk, rates will rise. This is the business cycle. >I just believe Peter schiff on this. Being as how he's been wrong on just about every public prediction he's made, and his hedge fund gets crushed both during the crisis (which he "predicted") and since, I think you'd do better to expand the borders of your economic prognosticators.
  - mactitan 12y ago
    Well my 1st expansion was looking at the bandwagon of ( Rogers, faber, schiff,...) I was about to invest at the peak of dot com but reading them kept me out Didn't buy during house bubble- I was wary of what this group was saying - but I couldn't convince my condo flipping acquaintances - my chicken little perception faded a bit. I do notice that it's very hard for analysts to be flexible , thus titles like perma bear/bull...
- inthewoods 12y ago
  "The pt. Is that nothings changed in the financial system" Actually, a ton has changed in the financial system - some good and some bad. Banks are larger than ever (bad - more potential systemic risk), but they're being more strictly regulated (probably better). Mortgage rules now exist that didn't exist in the housing bubble (generally good) - but Fannie and Freddie are the only game in town. Our bailout of Fannie/Freddie has now paid back the invested capital. And we haven't hit the hyperinflation that Peter Schiff and other similarly ill-informed pundits said would happen. The notional value of the derivatives contracts says nothing about the risk - just total exposure.