It is the bank's job to "sell" you money. When I went for my mortgage several years ago, they insisted I take out more than I needed and invest it. Same rationales were given. Each that I have refinanced ( 3 times), I have had to turn down more. 13 years ago, when I took out my first mortgage ever, the same thing happened....and that was right after the 87 crash.
The fact that they are pushing money doesn't mean credit has been expanded...it means banks are trying to make money wherever they can. Which is their job.
In sales, I try to convince every buyer that they should double their budget because of XYZ reason. Sometimes I succeed, sometimes I don't. Does that mean I have a large supply of what I am selling? Oddly, no. I sell a very constrained item. Media time is limited, and very perishable. Hence, I often try to sell more than I have available. That is the nature of sales. And banks "sell" money.
As for your over generalization of the penny stock into the market at large, I don't disagree that it's a bubble. But define it. You will find that it is impossible to find a proper technical definition to fit a bubble. You can talk all you want about what it looks like after the fact, or the "forces" that created it. But defining it is another problem. If you were able to define it, you would be able to know it each time you saw it, and you would know how to stop it as it developed (or at least know which tools to throw at it).
Unfortunately, such definitions don't exist. The earlier definition of "common sense" is the best you can get, and I replied that if you're pretty smart about how you follow stocks, it should be generally apparent...but sometimes bubbles aren't bubbles at all. Sometimes they are just really good companies that are growing rapidly. |
