Why you should expect even bigger, badder stock market bubbles ahead

Since back in 2009, I’ve long been predicting a bigger and badder stock market bubble than ever before. And we’re now in it. But that doesn’t mean it’s all about to come crashing down. Corporate profits, corporate profit margins continue to shock most economists (not me though). The Fed is still in “emergency measures” mode with 0% interest rates and QE and other stealthier forms of helping banks and corporations minimize financial costs (as I’ve outlined for years). The Republican/Democrat regime at the federal, state, county and local levels still kowtow to corporations with ever more excessive subsidies and protection. Every saver and/or retiree is still desperate to find some sort of yield and decent gains on their money. When will it end? The seemingly insanely huge advances in productivity our economy has gained from apps, smartphones, tablets, PCs, Internet, etc., is what has enabled the Fed to play these games much longer and has likewise enabled the Federal government’s debt/low-rates addiction to grow much larger than they would have been able to in other times. And so it continues for foreseeable future. Is it an endless bubble-blowing cycle after another? But to be sure, the U.S. isn’t destined to have a hard landing if/when all rates go up on all that debt upon which interest has to be paid. Indeed, this version of a 1%-3% slow-growth GDP economy is a self-fulfilling dynamic whereupon destructive policies always suck out anything above that, but never more than would cause it all to crash down. And it that could be here for years to come, no? In an article called ”Why you must fight the Fed and get ready for a new stock market bubble,” and in this interview with WSJ’s Simon Constable, both from 2010, I wrote the following to explain why we were likely headed into a stock market bubble — and it looks like we’re headed into an even bigger one today: “Both the fundamentals and the macroeconomic (i.e., Fed’s relentless liquidity/money pumping) forces seem to point to much higher prices… We’re done lowering rates and easing. But I do think the most likely scenario is, indeed, for a booming or even a bubble in the stock market again.” Sectors that I expect to bubble next includes wearables, robotics and drones and stocks like Ambarella, Apple and Sony. Be careful though and start slowly. What do you think? Tell me in the comments below or come join the discussion on Scutify.