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Pastimes : The Philosophical Porch

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To: Rarebird who wrote (26060)	6/10/2025 8:48:23 AM
From: Real Man	of 26251

Exactly, US stocks are extremely expensive. The share of the bond market also reflects that, and 40 years of Fed stock market management. No, I don’t believe in conspiracy that the Fed buys Spx futures directly. However, their liquidity injections at critical moments effectively activate derivative market forces that lead to sharp bounces and an expansion of the Buffett ratio. The primary Fed dealers crush speculators and pump the stock market higher. It’s a significant force which led to such extreme overvaluation per Buffett ratio. It can expand into perpetuity, but the rising interest rates introduce the pillar of collapse, into the bubble. No matter what you do money isn’t free anymore, and a deflating asset bubble is likely to set off a negative feedback loop in the United States alone. Americans have all their retirement savings in stock funds. The losers are put buyers, the primary dealers ensure options expire mostly worthless. However, the issue with credit fueled boom is that your credit card bill is due every month and the interest is compounding. Stock market profits must outpace that or else one has to sell assets to cover the bill, which is why I am so bearish.

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