Is the Fed Now Worried About a Stock Market Bubble?

They should be! Valuations are in the stratosphere!

by John Crudele at the New York Post:


Federal Reserve head Ben Bernanke and his board members are suddenly singing a different tune -- they're concerned about a possible bubble in the stock market.
If the Fed were an a cappella group they could call themselves Rip and the Van Winkles.
The problem: Stock prices have nearly doubled over the past year because there is no place for people to put their money.
Savers are getting next to nothing at the bank, so they have ventured back into stocks.
Still, average investors are not making this move in earth-shattering numbers. That, incidentally, proves that people sometimes do learn from their mistakes.
There is still a strong whiff that the stock market is being supported by supernatural forces on Wall Street, which are willing to rescue the market whenever there's trouble.
But if interest rates start to rise -- and they already have -- the attraction of stocks fades and the troubles rise.
The stock market suffered one of its few declines yesterday after rates rose in Europe because of Greece's debt problems and after Australia raised interest rates for the fifth time.
So, the Fed has reason to worry that it has kept interest rates too low for too long.
There's another problem: the nation's inability to create jobs, which is also being caused by high stock prices.
Huh!? Yes, this is what could be happening. Corporate executives always want to keep their stock prices high, for selfish as well as selfless reasons. To do that, they need to keep costs down.
So why would they hire new workers in an economy where we still only have "green shoots" if that might turn Wall Street off?
The Fed can't turn in any direction without bumping into another problem.