People Who Buy Stocks Must Be Idiots: The Yellen Bubble Denial Extends Bubble

Was 2008 really that long ago? Are today’s traders so young that they don’t remember it?

I hadn’t planned on saying anything about the Janet Yellen hearings because I think she doesn’t matter. The Federal Reserve System is a big scam that provides welfare to millionaires and billionaires at the expense of poor and middle class people. She will use her position to do exactly what any other Federal Reserve Chairman would do. So there was no need to pay attention to her. The Federal Reserve is evil and it needs someone to make sure it continues to do evil. End of story.

But how in the name of all that is holy can people be this stupid?

“By in large, I would say that I don’t see evidence at this point in major sectors of asset price misalignments, at least of the level that would threaten financial stability,” Yellen said.

If any bubbles emerged, the central bank would be willing to tighten policy to try to deflate it, she said, in words that represent a divergence of opinion from Alan Greenspan and, in practice, Ben Bernanke.

And in a blessing of sorts to record levels on the Dow Jones Industrial Average: “I think that if you look at traditional valuation measures, the kinds of things we monitor, akin, to price-equity ratios, you would not see stock prices in territory that suggests bubble-like conditions,” Yellen said.

She is out of her mind. Of course the stock market is a bubble. There is not a bit of different between her and Ben Bernanke. Marketplace is being insanely naïve to pretend that she is any different.

When people don’t want to face reality, they will embrace any lie no matter how flimsy.

And, of course, when Yellen claimed that the stock market was not in a bubble, she helped inflate it a bit more so that the S&P 500 went higher. People considered Yellen’s statement a reason to buy more stock.

Here’s a reminder of Bernanke never seeing bubbles.

And here he is, after the recession has hit and his QE to Infinity has produced results in the stock market:

Yellen is exactly like Bernanke. She will worry about a bubble as soon as she sees one, and she will never see one. Then, when the collapse happens, she will tell us that no one could see it coming.