Growing gap between the financial markets and the real economy

Aero Hedge ^ | 03/08/2014 | Seth Klarman

[Starboard]

Article based on excerpts from Baupost Group's Seth Klarman letter.

"there is a growing gap between the financial markets and the real economy...and the overall picture is one of growing risk and inadequate potential return almost everywhere one looks..."

[Starboard]

Renouned investor Seth Klarman's assessment is that "the Fed’s continuing stimulus and suppression of volatility has triggered a resurgence of speculative froth."

Good read on the state of the stock market.

[Starboard]

Source should read “ZeroHedge” not AeroHedge. Sorry for the typo error.

[stocksthatgoup]

The market for stocks and bonds are no more than a pool of liquidity. The more money (created) pumped in, the higher the market goes.

[lucky american]

As I've said for 5 years. When the Fed raises interest rates and takes away the stimulus money, you'll see a drop in the stock market you've never imagined.
Until then it's up, up, and away.

[CharlesOConnell]

So, what? Top Wall St. Masters of the Universe lay traps for greedy institutional investors by disguising Whata Piece-a Feces investments they aren’t allowed to make as You Can’t Lose Greatest Things (No Guarantees See Prospectus). Universe Massa’s first stop is the Rock Solid Investment House’s offshore lawyers to plan how they will deflect the inevitable lawsuits. Then they crow about how stupid their victims are We RIPPED THEIR FACES OFF when they get their $100 million bonuses. This is called Free Enterprise.

[CharlesOConnell]

AeroHedge, like vaporware.

[Starboard]

One wonders where the S&P would be today in the absence of QE. In a very real sense, the Fed IS the market.

IMHO, in its misguided desire to perpetuate the “wealth effect”, the Fed’s artificial support for the market has caused severe economic distortions and malinvestment that will haunt the economy for a long time to come.

[Starboard]

“AeroHedge, like vaporware.”

*********
I don’t understand what an innocent typo has to do with “vaporware”. What is the connection? Am I missing something profound here?

[kiryandil]

ROTFLMAO!!!

"Frankly, wouldn’t it be easier if the Fed would just announce the proper level for the S&P, and spare us all the policy announcements and market gyrations?"

[djf]

Gonna buy me some of dem Bitstocks!

[kiryandil]

So, what? Top Wall St. Masters of the Universe lay traps for greedy institutional investors by disguising Whata Piece-a Feces investments they aren’t allowed to make as You Can’t Lose Greatest Things (No Guarantees See Prospectus). Universe Massa’s first stop is the Rock Solid Investment House’s offshore lawyers to plan how they will deflect the inevitable lawsuits. Then they crow about how stupid their victims are We RIPPED THEIR FACES OFF when they get their $100 million bonuses. This is called Free Enterprise.

LOL!

Muppets!

BUY NOW, or BE PRICED OUT FOREVER!!!

I love the Truman Show analogy, and "Bernanke's Dome".

[Starboard]

That really hits at the absurdity of what the Fed is doing. To your point, as stated in the article: “Someday, the Fed’s show will be off the air and new programming will take its place.”