Schiller needs a clue

He complains about secular stagnation being a rumor harming the market.

When a Stock Market Theory Is ContagiousSince Sept. 18, the stock market has fallen more than 6 percent. An abrupt decline last week — after five years of gains — prompted fears that the market may have reached a major turning point. Has a bear market begun? It’s a great question. The problem is that short-term market movements are extremely hard to forecast. But we live in the present and must try to understand what’s driving markets now, even if it’s much easier to predict their behavior over the long run. Fundamentally, stock markets are driven by popular narratives, which don’t need basis in solid fact. True or not, such stories may be described as “thought viruses.” When they are pernicious, they are analogous to the Ebola virus: They spread by contagion.

Here is the chart showing QE and the SP500.  The market needs to know if the Fed is making another QE run because the market has to hold the liquidity over the cycle. Secular stags means, Yes, the Fed will make another QE run.  No secular stagnations means the market will start the next business cycle with a correction.

It is not that difficult.