I remember very well: in late 1999, everyone knew it was a bubble, and the word “bubble” had become a common term, though strenuously denied by Chairman Greenspan and others at the Fed, and by other official mouthpieces of Wall Street, but those in the market knew. They were just riding the wave, and the wave was too magnificent to get off. Money was being fabricated. IPOs were flying off the shelf, doubling and redoubling. Everyone was planning to get off the wave in the nick of time, ahead of the rest of them. And everyone was happy. Well not everyone. Not the poor souls who were driven out of San Francisco because they couldn’t afford to live here anymore. Not the folks who lost fortunes when it all blew up. Not the Fed that claimed afterwards that you can’t see bubbles when they’re inflating – which made the Fed look really stupid. But this time it’s different. Money is being fabricated. Investors are riding the magnificent wave for as long as possible. And they’re all planning to get off the wave in the nick of time, ahead of the rest of them. After five years of QE, and $3 trillion in new money floating around, risk is no longer priced into anything. In fact, it has disappeared as a factor.
Posted on: Tue, 12 Nov 2013 12:05:28 +0000
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