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Topic: Stock market bubble

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	The Costs of the Stock Market Bubble, by Dean Baker, CEPR, Nov. 2000
		It is also likely that a stock market correction will lead to a sea of litigation as investors try to recover some of their losses from corporations that provided misleading information or brokers who gave bad advice.
		It is possible that in aggregate, stock market induced consumption may have a significant negative impact on the purchasing power of the rest of the population in the areas outside of housing, but it would be difficult to try to measure this effect.
		In each case, it is assumed that the stock market in subsequent years rises at the same rate as corporate profits, which is assumed to be equal to the growth of the economy.
	www.cepr.net /documents/publications/stock_market_bubble.htm (10580 words)

	Stock market bubble: Definition and Links by Encyclopedian.com
		A Stock market bubble is a type of economic bubble in which an exaggerated bull market where the value of stocks listed on a stock exchange rise dramatically upon a wave of public enthusiasm.
		Still other examples of stock market bubbles include Japanese stocks in the late-1980s, Nifty 50 stocks in the early 1970s, and Taiwanese stocks in 1987.
		A stock market bubble may set the stage for a later stock market crash, continuing our example, the Stock Market Crash of 2002.
	www.encyclopedian.com /st/Stock-market-bubble.html (379 words)

	Stock market bubble - Wikipedia, the free encyclopedia
		A stock market bubble is a type of economic bubble taking place in stock markets, in which a wave of public enthusiasm, evolving into herd behavior, causes an exaggerated bull market.
		Stock market bubbles are inconsistent with the "Efficient Markets Hypothesis," which makes their existence a matter of some debate.
		Some of the first documented economic bubbles were the South Sea bubble in England in the 1700s and the Tulip bulb bubble in Holland in the 1600s.
	en.wikipedia.org /wiki/Stock_market_bubble (810 words)

	FRB:Speech, Bernanke--Monetary policy and the stock market--October 2, 2003
		Although a stock price multiplier of about five for unanticipated changes in the federal funds rate is certainly not negligible, we should appreciate that unexpected changes in monetary policy account for a tiny portion of the overall variability of the stock market.
		For example, we investigated whether the magnitude of the effect on the stock market of a surprise policy tightening (that is, an increase in interest rates) differs from that of a surprise easing of comparable size.
		The stock market multiplier associated with unanticipated policy moves that are perceived to be more permanent is a bit higher, as would be expected; its value is about 6.
	www.federalreserve.gov /BoardDocs/Speeches/2003/20031002 (6120 words)

	Stock Market Bubble
		While the stock market does make an important contribution to capital accumulation and the production of wealth, it is far from an unlimited one, and its contribution is not enlarged by hordes of essentially ignorant people dabbling in it on the basis of tips and hunches.
		The application to the stock market is that the market will stop rising as soon as the Federal Reserve becomes sufficiently alarmed about the inflationary flooding of the economy as a whole that emanates from the stock market bathtub so to speak.
		The extent to which the rate of increase in the stock market in the last several years is unsustainable without the accompaniment of rapidly rising prices can be inferred by estimating the long-term sustainable rate of increase in the production and supply of goods and services from year to year.
	www.capitalism.net /articles/stockmkt.htm (4334 words)

	Institutional Failure, Foreign Issuers, and the Stock Market Bubble of 2000.
		Although there are many variations on stock option plans, a typical plan gives an executive the right to buy stocks from the company at at fixed price and to resell these stock within the next ten years, at a time of his or her choosing.
		Corporations were buying back their own stock in huge quantities, while individuals, on balance, were selling stocks, with about two-thirds of the proceeds being directed towards money market funds, corporate bonds, and deposit accounts (See household flow analysis).
		It was the sudden increase in net sales by individuals, mainly exercising stock options, at a time when buybacks by domestic companies were neutralized by new issues by foreign corporations, that popped the Great Bubble and crashed the stock market in 2000.
	www.capital-flow-analysis.com /investment-tutorial/case_2a.html (1241 words)

	Case Study: Applied Capital Flow Analysis: the US Stock Market Bubble (1990-2000)
		From this we conclude that the primary reason for the long up trend in stock prices during the 1980s and 1990s was that domestic corporations were intent on repurchasing and canceling their own stock while open-end mutual funds were also buying equities regardless of price.
		What caused the market crash of 2000-2001 had nothing to do with a decline in investor confidence in common stocks or an awakening among corporate executives, fund managers, or the SEC as to the unfairness of buybacks.
		In 1996, the bull market raged on, with the SandP 500 index increasing another twenty percent, with further erosion of fundamentals.
	www.capital-flow-analysis.com /investment-tutorial/case_2.html (1464 words)

	AEI - Short Publications
		A close look at the role of governments in markets during the last half of the 1990s suggests that the Fed's role in creating preconditions for a stock market bubble was, at most, peripheral and that the Fed did undertake to cool an overheating economy in 1999.
		While 1999 was the exhilarating bubble year for the U.S. and other global financial markets, the year 2000 saw the start of a period when the bubble became self-correcting as the underlying conditions supporting it melted away.
		The steep drop in the stock market was accompanied by an abrupt slowdown in United States economic growth driven largely by an inventory sell-off and continued falling investment spending.
	www.aei.org /publications/pubID.14315/pub_detail.asp (2517 words)

	Asia Times Online :: China Business News - Politicizing China's stock market bubble
		So according to that theory, a stock-market bubble burst shortly before the 17th Party Congress could be used as an excuse by Wen's political enemies to attack the premier at the meeting, which could jeopardize his position.
		The market economy is a free economy under supervision, so it is good, according to Wang, for more and more people to participate in the capital market, taking their savings out of the banking system to reduce banks' excessive liquidity.
		Stock markets are like beer, so it is acceptable to have some bubbles, according to him.
	www.atimes.com /atimes/China_Business/IE30Cb01.html (943 words)

	Fed Should Have Acted Against Stock Market Bubble
		His argument was that he might have caused unnecessary and unpredictable harm to the economy by raising interest rates in order to contain the stock market bubble.
		Add in the millions of people who lost the bulk of their retirement savings in the bubble's collapse, and it is clear that it was irresponsible for the Chairman of U.S. Federal Reserve to remain silent in the face of history's largest financial bubble.
		There is currently a $3 trillion dollar bubble in the housing market, which when it breaks could have an effect similar to the bursting of the stock market bubble.
	www.commondreams.org /cgi-bin/print.cgi?file=/views04/0106-11.htm (656 words)

	China Economics Blog: China Stock Market Bubble update
		Moreover Recently we have witnessed that Indian stock market has touched new heights surprisingly IT sector was not part of it.
		Recent fall in Indian stock market was due to Overbought Nifty, USA recession margin pressure and panic.
		All in all we suggest be in Indian stock market and if you are investor invest with the proper strategies like go Long for maximum 1 week that too with proper stoploss and target.
	china-economics-blog.blogspot.com /2007/08/china-stock-market-bubble-update.html (1621 words)

	Greenspan Defends His Policy Toward the Late Stock Market Bubble: Archive Entry From Brad DeLong's Webjournal
		There is a principal about asset market bubbles: a policymaking authority like the Federal Reserve can never be sure enough that an asset market rise is a bubble in order for it to take steps to pop it.
		After he first raised the issue of whether the stock market was overvalued in his "irrational exuberance" speech in late 1996, Mr.
		Greenspan said the actual amount of stocks that are purchased on margin -- meaning the investor uses a percentage of the stock's value as collateral for a loan to buy the stock -- is very small relative to overall stock-market activity.
	www.j-bradford-delong.net /movable_type/archives/000789.html (2130 words)

	Reactions to stock carnage: "The bubble has burst" - Salon (Site not responding. Last check: )
		I think that intuitively people knew that the market was artificially propped up, but everyone has been making so much money in the market in the last two or three years, so no one wanted the music to stop and it kind of took on a life of its own.
		The stock market needs to be sobered up a bit -- sure, some of the stocks were overvalued, there wasn't a ton of rationality in some of these investments.
		But some stocks are totally rational bets, and some market leaders are extremely valuable companies that will only get more valuable in the next 20 years as they move into a truly global integrated economy.
	dir.salon.com /tech/feature/2000/04/14/stocks/index.html (1030 words)

	The Federal Reserve Board and the stock market bubble: the relationship is more complex than it appears Business ...
		The stock market rose to unprecedented valuations in the late 1990 and was widely considered to be a bubble.
		The one clear measure of the market bubble is the market price-to-earnings ration (P/E).
		There are two new-era arguments as to why the stock market is different this time and why we are now in a new and sustained higher level of market valuation.
	www.findarticles.com /p/articles/mi_m1094/is_2_38/ai_102662133 (1039 words)

	Five years after stock market bubble, exuberance still lingering (Site not responding. Last check: )
		Investors began 2000 having enjoyed four years of amazing stock market gains, fueled by the rise of the Internet and explosive growth in a variety of technologies.
		For many, the bubble illustrated what happens when you hold on to stocks for too long, ignoring sound investment decisions in favor of what Federal Reserve Chairman Alan Greenspan famously called "irrational exuberance" -- and that term was coined back in 1996.
		But because the club had reduced its exposure to risky stocks, "when the bubble broke, we lost some like everyone else, but we weren't as vulnerable as we could have been," he said.
	www.post-gazette.com /pg/05013/441404.stm (788 words)

	Is the Current Stock Market "A Bubble?"
		Yet Greenspan referred to the stock market as "a bubble" in a prepared speech when the Dow was about 6000.
		Only in a bubble can a stock like At Home Corporation be worth $2 billion on its first day of trading when it posted revenue of only $2 million and lost $23 million for its previous six months.
		Stock market moves nearly always precede economic events, and therefore people rarely predict the event which might cause a market decline.
	www.gold-eagle.com /editorials_98/tice120598.html (1232 words)

	STOCK MARKET BUBBLE - HIGH EPS AND RELATIVE STRENGTH STOCKS
		No stock market buyers remain, the bubble bursts and there is a stock market crash.
		Here at Growth Stock Analytics, we've been through at least one stock market bubble, and know that the only way to avoid one is to be in constant touch with the pulse of the stock market.
		Stock Database is a one-stop source for stock market bubble, and research/investing in high relative strength stocks:
	www.growthstockanalytics.com /stock_market_bubble.html (435 words)

	Main Page - China Stock Market
		Even though the stock market in China is young (started since early 1990), and it has a total market capitalization of only less than $2 trillion, the prospect for growth can not be overstated.
		Investing in China's stock market is no exception, which may be even riskier to foreigners in many cases, although investing in the China ADR on NYSE can be as safe/risky as investing in a US company.
		The Chinese stock market, as often measured by Shanghai stock exchange composite index, has been the best performing stock index in the world so far this year (up 50% by mid-May), which genereated a lot of press coverages and speculation on China Stock Market bubble and Chinese stock market crash.
	chinastockswiki.com /wiki/Main_Page (605 words)

	The stock market bubble and Mr Greenspan
		Faced with the criticism that he should have been aware that a financial bubble was in process—at least from the time he made his famous statement about the “irrational exuberance” in December 1996—Greenspan sought to justify his actions at this year’s annual financial symposium held in Jackson Hole, Wyoming, at the end of August.
		His comments amount to an admission that those in charge of the “free market” are powerless in the face of economic and financial processes that have wiped out the life savings and destroyed the retirement plans of millions of people.
		It is estimated that of the stock market gains between 1989 and 1997, around 86 percent went to the top 10 percent of households, while just over 42 percent went to the top 1 percent.
	www.wsws.org /articles/2002/sep2002/gpan-s18.shtml (1614 words)

	Stock Market Crash of 1929
		Stocks were seen as extremely safe by most economists, due to the powerful economic boom.
		Millionaire margin investors became bankrupt instantly, as the stock market crashed on October 28 th and 29 th.
		The stock market crash of 1929 was identical to any other financial bubble.
	www.stock-market-crash.net /1929.htm (688 words)

	Stock Market Bubble and fair value
		Stock prices have fallen three-years in a row, so they are bound to rally is one reason.
		The deflation that is coming will occur in the investment markets with stocks and bonds, in real estate and with credit-related consumer goods such as autos and other big ticket items and luxury goods.
		Stocks are cheap only if you think there are other idiots out there willing to pay you even a higher price for the stock you just bought.
	www.usagold.com /gildedopinion/puplava/20020927.html (4575 words)

	Stock market bubble ready to burst?
		Meanwhile, the stock market hit an all-time high of 13,000 last Wednesday, setting a new trading high of 13,148 on Friday, before closing at 13,120.94.
		WND previously attributed the continued rise of the stock market to an excess of liquidity in world markets.
		Chapman continued to predict a collapse in the heavily leveraged $1.4 trillion dollar unregulated hedge fund market and in the little-understood derivative market where leveraged exposure may be as high as $500 trillion.
	www.worldnetdaily.com /news/article.asp?ARTICLE_ID=55443 (513 words)

	Stock Market Cycle - Bubble in Bull Markets
		When the bubble is inflated, bull markets tend to slow down a little which is what known as market correction.
		For long term stock investors, even if the stock prices go down a little during market correction, it is still not a very good time to buy stocks.
		They will buy the stock as long as the value is lower that the highest P/E. For example, if the P/E of stock ABC is 50 whereas the P/E of company XYZ is 40, the speculators would believe that company DEF is offering cheaper valuation.
	www.stock-investment-made-easy.com /stock-market-cycle.html (868 words)

	Stock Market Crash! Blog
		According to Yale Hirsch of the Stock Trader's Almanac, most of the gain's in the stock market tend to be made between November and April, with the summer months tending to be flat or negative as Wall Street heads to the Hamptons for vacation.
		The impact of hedge funds in the commodity markets should not be underestimated, as they account for "one-half of the (trading in the) commodities sector", according to the article "Demystifying Hedge Funds".
		At the height of a bubble, most skeptical ideas are quickly dismissed by the investing public, saying "the market won't crash, but it may level off for a while" and "skepticism isn't profitable" and other variations on this theme.
	www.stock-market-crash.net /blog.htm (7780 words)

	Chris Farrell: The Stock Market Bubble Debate
		Better yet, the market's recent performance suggests the fear that the stock market is a bubble set to burst is wrong.
		The stocks of dot-com companies with quality management are holding up while those operations burning through cash are getting hammered.
		But in all cases, it appears that investors are acting with a degree of reason and discrimination that belies the bubble thesis.
	marketplacemoney.publicradio.org /archive/old_features/chris000610.htm (399 words)

	Safe Haven \| International Stock Market Bubble
		I am calling this a stock market bubble because of the massive and unreasonable rise, with periods of sharp simultaneous selloffs even in unrelated markets.
		This heavy indexing moves stock markets together, meaning that markets as different as Japan and Canada tend to rise and fall together.
		Volatile markets are a dangerous place to gamble, especially when there is evidence that a stock market bubble might be bursting.
	www.safehaven.com /article-5488.htm (806 words)

	Why stock market bubble may continue to deflate \| csmonitor.com
		Lacy Hunt, an economist with Hoisington Investment Management Co., in Austin, Texas, figures the stock market is due for a repeat of such poor performance after the bubbly 1990s.
		That's because, in his view, stocks are excessively valued today, despite the drop in prices since the market peaked in the first quarter of 2000.
		One caution: "They don't tell you what the stock market is going to do over the next six months or tomorrow," notes Paul Kasriel, director of economic research at Northern Trust Co. in Chicago.
	www.csmonitor.com /2001/1105/p21s1-wmpi.html (989 words)

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