Junk Glistens Under ‘Bernankecare’ as Worst Stocks Win

[Chris_]

Junk Glistens Under ‘Bernankecare’ as Worst Stocks Win

The Federal Reserve’s near-zero interest rate turns five years old next month, the longest period without an increase in history. Coupled with more than $3 trillion of asset purchases, it adds up to “Bernankecare,” said Joshua Brown, chief executive officer of Ritholtz Wealth Management in New York. And it’s causing parts of the market to behave strangely. Stocks of companies with weak balance sheets are rising twice as fast as stronger ones; junk borrowers get rates lower than their investment-grade counterparts did before the credit crisis; and initial public offerings are doubling on their first day of trading.

While in the minority, some investors say prices have climbed so high it’s possible to look ahead and see an ugly end. Laurence Fink, chief executive officer of BlackRock Inc., the biggest U.S. money manager, said in an interview with Bloomberg Television on Nov. 12 that he feared a bubble and the Fed ought to quit buying so many securities.

At the same time, investors are awarding some of the highest valuations to companies that have struggled to produce consistent profits. Amazon Inc. (AMZN) trades at about 1,300 times reported earnings. Netflix Inc. is valued at 197 times income and Consol Energy Inc. has a price-earnings ratio of 104.

Bloomberg

Bubble, bubble, toil and trouble.

[marv]

Is anyone beside myself concerned that there are very deep pockets "seeding" the Dow, getting ready for a really big cash-out?

[Chris_]

Is anyone beside myself concerned that there are very deep pockets "seeding" the Dow, getting ready for a really big cash-out?

When this bubble bursts, it's going to make the dot com recession look like a game.

[JohnnyReb]

When this bubble bursts, it's going to make the dot com recession look like a game.

Then Obama ditches Moochelle and rides in on a white whore to save the day...proclaims I am FDR arisen from the rave.

[J P Sousa]

 This quote is old but accurate;

  Bernanke is like an arsonist firefighter, who creates a crisis and then gets treated like a hero because he resolved it. 

http://bubblemeter.blogspot.com/2010/01/paul-volcker-for-fed-chairman.html

.

[NHSparky]

All the more reason to cash out the 401(k) and invest in canned food and shotguns.

[J P Sousa]

I recently read an old article;

  Reaganomics Vs. Obamanomics: Facts And Figures

an article for The Wall Street Journal entitled “Reaganomics v Obamanomics,”

which argued that the emerging outlines of President Obama’s economic policies were following in close detail
exactly the opposite of President Reagan’s economic policies.

These are the reasons why economist John Lott has rightly said, “For the last couple of years,
President Obama keeps claiming that the recession was the worst economy since the Great Depression. 
But this is not correct.  This is the worst “recovery” since the Great Depression.”

The Reagan Recovery took off once the tax rate cuts were fully phased in. 
Similarly, the full results of Obamanomics won’t be in until his historic,
comprehensive tax rate increases of 2013 become effective. 

http://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/

That last line is what worries me most.
.

[Lacarnut]

I recently read an old article;
 

That last line is what worries me most.
.

The sh!t will really hit the fan by the time 2015 arrives. That is when the doctors and hospitals hook up to a government computer and a bunch of unelected government workers will be selected and they will decide whether an operation or treatment is cost effective. In other words, an 80 year old may be denied a hip replacement or cataract surgery because he/she is past the average age of life. We are talking about death panels in the case of a cancer patient. The liars in the Obummer say this is not so but good old EU socialized medical and hospital care are coming our way.