So in other words 7% of the market’s upside since 2008 is real. (I’ll bet even that is generous.) This should concern anyone who thinks that economics is more than smoke, mirrors, and animal spirits.
The economist who did this speaks of a tech bubble, housing bubble, and now Fed bubble. But it is really Fed bubble 1, 2, and 3.
(From Yahoo Finance)
Scouring hundreds of different factors, Barnier ultimately whittled it down to just four factors: GDP data five years into the future, household and nonprofit liabilities, open market paper, and the Fed’s assets. At different stretches of time, just one of those was the single biggest driver of the market and was confirmed with regression analyses.