[quote=spdrun]Big unknown as to how, though. Pushing money into speculation diverts it from productive activities. Remember that the Fed tightened and KEPT tightening even after the NASDAQ bubble started deflating in 2000.
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I think the fed’s committed to completing the taper no matter what happens to the stock market or the economy. Their ego’s are too big and they are slow to act. The economy could enter recession later this year and QE reboot probably wouldn’t come until mid 2015 at the earliest. Even if QE or some other stimulus did come back quickly after the economy declined it will be too late. The confidence in the fed will already be eroded at that point.

Most of the bullish analysts are betting on heads I win tails you lose kind of logic right now. I.e. if the economy does poorly it’s ok to be long because the fed will be there to bail out the market, or it’s ok to be long because the economy is getting better.