Animal Spirits Podcast Is the Fed Trapped? (EP.239)
Jan 12, 2022
The hosts dive deep into three bearish stock market scenarios and question the Federal Reserve's tight position with inflation. They explore the relationship between sports betting emotions and market stability, while drawing parallels between Beanie Babies and the NFT craze. The resilience of NFTs in a crypto downturn takes center stage, alongside discussions on the evolving job market and housing challenges post-pandemic. Intriguing insights on market psychology and cautious investment strategies round out this thought-provoking discussion.
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Beanie Babies vs. NFTs
- Michael Batnick and Ben Carlson discuss the Beanie Baby bubble.
- They compare it to the current NFT market, noting the speed of investment via platforms like eBay and OpenSea.
Inflation and Stock Returns
- High inflation periods (above 6%) see stocks maintain nominal returns but real returns near zero.
- Despite this, stocks offer some protection against inflation's erosive effects.
Market Overvaluation
- The current market surge is the second-best 21-month period since 1950.
- A potential market downturn may be due to overvaluation rather than external factors.
