A New York University economics professor says that he doesn't believe there's a bubble in the U.S. stock market but one could develop in about two years. "I don't think today there is a stock market bubble because earnings have been growing so fast that probably valuations today are justified by what has happened with earnings," said Nouriel Roubini, whose critical and consistently bearish economic views have earned him the nickname "Dr. Doom." Roubini told Xinhua after the "Pan European Days" conference at the New York Stock Exchange Monday night that if the economy doesn't accelerate significantly, then the market will develop into a full-fledged bubble in two years. There then would be a crash in three years, said Roubini, who was a senior economist in the White House Council of Economic Advisers during the Clinton administration. "I wouldn't say today there is one (bubble), but I'm worried about essentially easy money pushing asset prices higher and that is going to have an effect on economic activity," Roubini said. The Fed's massive stimulus was commonly seen as the key driver of the stock market's bullish run since the start of this year. But major stock indices have been very volatile since last week. That was when Federal Reserve Chairman Ben Bernanke hinted at a possible reduction of the quantitative easing plan in the next few policy meetings if evidence showed the economic improvement is strong and sustainable. Roubini told Xinhua that there has been a recent paradox between the stock market and fundamentals as prices go up on both good and bad economic news. "'The bad news is good news for the market' implies that the Fed is going to give more asset inflation," the professor said. Roubini said, however, that "eventually, the levitation forces of liquidity cannot dominate the gravitation forces of economic fundamentals." As the present numbers suggest that the U.S. economy is growing slowly and unemployment remains high, Roubini predicted that the Fed will keep quantitative easing for another year. The exit process, Roubini said, will be very slow "in a way the market can digest."
GMT 11:02 2018 Tuesday ,11 December
ASE opens trading on lower noteGMT 15:40 2018 Monday ,10 December
Amman stock market closes trading at JD4.4 millionGMT 19:10 2018 Wednesday ,05 December
Index at Palestine stock market drops by less than one pointGMT 17:58 2018 Sunday ,25 November
Amman stock market wraps up trading at JD2.6 millionGMT 14:24 2018 Thursday ,22 November
Russia’s stock market demonstrates record-breaking figures in 2018GMT 11:45 2018 Tuesday ,20 November
Tokyo stocks close lower as tech issues weigh, Nissan tumblesGMT 15:08 2018 Monday ,19 November
Amman stock market wraps up trading at JD6.1 millionGMT 15:51 2018 Sunday ,18 November
U.S. stocks post weekly losses amid tech shares routMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Send your comments
Your comment as a visitor