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Ben Bernanke is boring his audience with his pre determined remarks we know what he's gonna say we're waiting for the culinary and you'll get it when he starts it meanwhile.
I'm joined by my colleagues.
That yet Ed but Chelsea he pops up on the screen that's the last few under -- -- the same question.
Is the stock market rally the Dow up 151500.
Is that because -- is printing money at the task -- thrust.
No it's not a you know it'll -- -- short term moves based on what he says but the reason stock prices are higher is because corporate earnings are coming in fairly well.
That's it that's only gonna say it's none of it all right I got a lot more -- negative when we're doing the -- -- ground if I mean it is it's a total anywhere I apologize if it is a lightning round and I confuse everybody's so Melissa is this rally because of Ben Bernanke printing money.
Absolutely I couldn't disagree with -- more it that it Vasily what it's all about it's that easy money out there and use not immediately when -- -- hints that he might cut back a little bit.
We saw the stock market really falter without question this is a market that can't stand on its own.
Two feet when the training wheels come off.
We're in big trouble.
Fed critic judge justice and justice no you can promote -- -- judge the justice Celek stepped up this question.
Our colleagues wouldn't -- but you know way about -- -- but is routed the result -- -- printing I am not not as qualified as my colleagues to opine on this but it is obvious even to any.
-- of the scene.
Wall Street is drunk on free cash apps and to the extent that -- has given to them and that they think he will give it to them into the future.
They'll borrow it they'll buy it and -- bad.
You agree with that -- that -- -- No end and Melissa let me say short term moves you're gonna -- because -- the markets are driven by computer programs and they're set -- they're gonna have moves.
And and you didn't see them go hire you if you -- -- in the short run but in the long run Melissa there's no dotted line and I'm bigot for anyone to prove to me there's a bottom there's a dotted line between printing of money and corporate earnings.
Haven't seen it on any show anywhere I've watched it.
Let me say we haven't seen any real growth in the economy -- -- that that's not what's spurring that the stock market right now I mean we haven't easy corporate profits go up but not revenue.
There isn't money out their duties and -- right now we are I don't wanna get you want to -- into the snow leads us -- -- -- -- -- You asked about the stock market you can ask about corporate earnings -- to talk about that I know the rising on the court that while -- second I don't let me let me just -- to everybody yeah.
Ben Bernanke is printing money he is deliberately keeping interest rates absolutely near zero flat down.
Think about that doesn't affect it.
-- it does.
Because back not -- until he might have done and what exactly etc.
if you all those interest rates all the way down it means that if you had to buy a bombed you'll rates of return on.
Is useless -- virtually zero.
So buying bonds is not very attractive.
By contrast buying stocks is very attractive because you rate of return is much better.
Anybody with any money has to make a choice put it in bonds -- -- gold putting in -- -- interest rates at near zero you put it in stop I don't bombs go ahead a bit though the discount the discount rate in the Fed fund rate is set by policy not by printing of money.
I'll get but the -- -- -- offensive Bob -- the Fed policy is to keep the federal funds rate and the discount right way way down that it that doesn't I completely agree with that.
It's all about -- -- of the money.
It's it's all their policy that is driving it investors into the stock market and on -- from semantics you're right I think we're talking about the policy in general that was being easy money flowing however you define that.
Whether that's through their bond buying program or whether that's through low interest rates has forced investors in the stock market it's also -- the housing market you have to wonder.
As we watch the thirty year rise what is gonna happen in those homebuyers initially telling people get into the market because rates are going up.
That is going to kill the housing recovery enough market that is I don't know.
-- judges next what what what is the inevitable consequence.
Of artificially low interest rates.
A bubble that's exactly what's gonna happen because at some point Barbara have to rise to their natural rate and no one will be equipped to pay those rates because they used to getting this free money last word Ed before got a break.
Well I mean the difference Melissa is very important because the -- the printing of money does not push the short term interest rates lower.
And it's really affecting on the long end and I look at corporation that talk to corporate CFOs and CEOs and the printing of money does not benefit them and let your -- bank.
Can banks I -- the stock might start already -- that point you were talking about policy in general on his entire policy right now has created an artificial rise in the stock market but I'm afraid is gonna go away when -- back off if they ever do on everybody's point we'll -- When I was -- -- -- looks around -- sensitive in new York and in Dallas we're looking for -- looks in Washington because.
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