The “TINA” Stock Market: More Record Highs
“As long as the music is playing, you’ve got to get up and dance.”
–Former Citigroup CEO Charles Prince; July, 2007
Investors who remember what happened the last time the music stopped are — to put it mildly — ambivalent as they watch major stock indices march ever-higher the last few weeks.
Is it a bubble?
How long will it continue?
My answers: a) not clear (companies in fact are booking record profits, notwithstanding the soft economy); and b) probably longer and higher than many people expect, based on previous such “episodes” the last two decades.
Even if the Fed stopped injecting (hyper)liquidity into the system tomorrow, the lag effect associated with monetary stimulus is such that current trends would likely continue for awhile.
P.S.: The other explanation for the market’s stellar performance: “TINA” (as in, “There is No Alternative”).
