Yellen cites 'potential dangers' in U.S. stock valuations

[Omaha Steve]

Source: Reuters

BY MICHAEL FLAHERTY AND ANNA YUKHANANOV

(Reuters) - Federal Reserve Chair Janet Yellen on Wednesday said high equity valuations could pose potential dangers but that stability risks across the U.S. financial system remained in check.

"I would highlight that equity market valuations at this point generally are quite high," Yellen said. "There are potential dangers there."

Yellen's view on the run-up in stocks was an answer to questions from International Monetary Fund Managing Director Christine Lagarde, who joined the Fed chief for the opening session of the "Finance and Society" conference here.

"We’ve also seen the compression of spreads on high-yield debt, which certainly looks like a reach for yield type of behavior," Yellen said.

FULL story at link.

http://s1.reutersmedia.net/resources/r/?m=02&d=20150506&t=2&i=1046194514&w=644&fh=&fw=&ll=&pl=&r=LYNXMPEB450O2

Federal Reserve Chair Janet Yellen addresses the Institute for New Economic Thinking Conference on Finance and Society at the IMF in Washington May 6, 2015.
REUTERS/KEVIN LAMARQUE

Read more: http://www.reuters.com/article/2015/05/06/us-usa-fed-yellen-idUSKBN0NR1JI20150506

[wordpix]

1. the 1% has so much $ it keeps investing in stock market

How many $20 million homes can you own when you're worth $35-50 billion like the Kochroaches, Sheldon Adelstein and the Saudi royals?

[on point]

2. We have asset price inflation bubble at top end. Supply side failure

Again the neo liberal trickle down austerity dogma faces another failure. The rich have too much money and no where to park it. Assets they buy be it stocks, mansions or yachts are in a bubble