1) Buybacks aren't "artificial" inflations, they're a standard practice -- and don't explain multi-year broad-based rises in prices. Plus, if shares are bought back with credit, that will show up on the company's ledger.More like by pumping up stock prices, which are being artificially inflated by widespread buybacks, high-frequency trading, and trillions of dollars in Fed cash. Look at your graph real closely, and then consider why that graph may not be saying a good thing about the economy.
2) Policies like QE have nothing to do with high-frequency trading; even without QE, that was going to happen. Perhaps we can say that the Obama administration hasn't tried to rein in HFT, but then we're back to issues of an obstructionist Congress.
3) Again, it's not clear how actions like QE would really prop up a stock market. Nor would that seem necessary, since (again) the corporations are reporting huge profits and sitting on big cash hoards.
4) Stock prices are only one part of the LEI.
Actually, it suggests that the companies aren't interested in accumulating debt (a practice that contradicts your implication that Fed lending policies are encouraging stock buybacks). There's plenty they could spend it on, such as improving wages or making capital improvements. Regardless of the rationale, it makes the company's bottom line look better, and is a reason for high stock prices, unrelated to Fed actions.It suggests they aren't spending money because they either have nothing to spend it on or are hoarding cash out of concern that they may need it soon.
The bad weather doesn't explain it all, but it's a big chunk. More to the point is that one quarter with a -1% GDP growth is not an indicator that the entire economy is going to hell in a handbasket (as the OP implies). Nor have you actually articulated which indicators are currently negative.Actually, pretty much everyone agrees there were other reasons for bad indicators and that weather does not come close to explaining it all. The pent-up demand is probably true, which is why some of the indicators look better right now.
1) LTCM's bailout was engineered by the New York Fed, not Washington. And it didn't cost the taxpayers a cent.Oh come, come, the bailouts of big money institutions and moral hazard was Long-Term Capital Management and the housing bubble started getting blown up in the late 90's to cover for the dotcom bubble.
2) I do agree that the seeds of the housing bubble do extend to the Clinton years, namely a reluctance to regulate derivatives. However, blaming any President for the housing bubble is incorrect. Aside from a lot of non-governmental factors, the same lax policies were pursued by Clinton and Bush and Greenspan, and aided by players from both sides of the aisle.
3) It is slightly ridiculous to suggest that anyone intentionally started a housing bubble to cover for a stock market crash. You're looking at nearly 8 years of Fed policies of keeping interest rates low, with wide-spread resistance to the Fed raising any rates. Plus, again, many other factors had nothing to do with any government policies.
In terms of "moral hazards," it's worth noting that before the modern Fed was created, the banks often bailed each other out in similar crisis. Oddly enough, no one seemed to fear the moral hazard when private banks were taking on the role of the "lender of last resort." Hmmm.
That's pretty much what I'm saying. The Fed doesn't have any more tools to deal with another downturn, though it could step in again to deal with failing banks.Hyperinflation is not something a central bank aims to achieve. It is a function of mismanagement. The Fed is not stupid enough to get the U.S. into that sort of mess, in my opinion, which is why I do not think they will do much about another downturn. All they could do in the event of another serious downturn is print money like crazy, which could easily lead to hyperinflation and hyperinflation means default.
But that still leaves the question: Which "meaningful indicators" suggest we are heading for another recession this year, as you claim?