For a long time, I have had great respect for the financial writing of Alan Abelson. His insight combined with a unique style are extremely effective.
This paragraph captures the essence the current state of the American economy:
"Yes, indisputably we have a recovery. But it's still far from a robust one, and certainly nowhere near as robust as the stock market's extraordinary upswing since hitting bottom in March '09 would suggest. Maybe this economy is just a late bloomer and will develop into something worthy to be called an expansion. Put us down as hopeful but unconvinced."
Abelson, Alan, 2010. Street crime. Barron's, Jan. 22.
Later in the article, Abelson highlights the financial research of Barry Ritholtz of Fusion IG. The title is "How Much has the Fed Distorted the Stock Market."
This is the bottom line:
"While it obviously can't be determined to the penny, Barry reckons that even if only half the market's superior showing compared with the best of previous postwar rallies can be credited to the Fed, it means that the U. S. central bank created out of thin air 'several trillion dollars in market cap.'" bold added
For related blog posts, see:
It is hard to know the correct level of federal financial intervention. However, when distortions appear, it is often very clear to see.
Folks should read Barron's on a weekly basis!!!
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