Is The Fed To Blame For The Bursting Of The Tech Bubble?

Tyler Durden's picture

Correlation is not causation but...

 

 

As a reminder Fed Governor Dan Tarullo (in charge of supervision and regulation) also warned (on Feb 25th):

  • *TARULLO SEES RISK OF LARGE LOSSES IN LEVERAGED LOAN FUNDS
  • *TARULLO: FARMLAND, SMALL TECH FIRM VALUATIONS SEEM `STRETCHED'
  • *TARULLO SEES RISK OF LARGE LOSSES IN HIGH-YIELD CORPORATE BONDS
  • *TARULLO FAVORS KEEPING OPTION OF USING RATES AGAINST BUBBLES

How soon we forget?

"expectations fostered by forward guidance of continued low rates, may be incentivizing financial market actors to take on additional risks to boost margins, thereby contributing to unsustainable increases in asset prices and a consequent buildup of systemic vulnerabilities."

Don't fight the Fed!

And what he said last night...

  • *TARULLO SAYS POLICY HASN'T CREATED 'PREFERRED' RECOVERY