In reference to the prior post and record breaking S&P P/E Ratio. This is what Janet Yellen had to say in her testimony earlier today in front of the House Financial Services Committee.
“I think market participants likely are anticipating shifts in fiscal policy that will stimulate growth and perhaps raise earnings,” Yellen said, responding to a question about what is behind the markets’ meltup.
Well, what do you call zero interest rates along with massive rounds of QE Ms. Yellen………anti-growth? Will more stimulus or tax cuts add to the fire? Perhaps. Yet, as was discussed here so many times before, stimulus/debt is not a solution, it is a major problem. Sooner or later it will not impact earnings. We might be reaching that point today.
Perhaps Ms.Yellen’s quote above will go down in history on par with Irving Fisher’s 1929 now famous quote.
Stock prices have reached what looks like a permanently high plateau.