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Opinion
Richard Cookson

Some Bad Words About the Riskiness of Equities

At some stage the bond bull market will crack. There will be trouble if equity and debt prices start moving in the same direction. 

Whatever happened to William McChesney Martin’s punch bowl? 

Whatever happened to William McChesney Martin’s punch bowl? 

Photographer: Bettmann/Bettmann

It’s fully 65 years since William McChesney Martin, then chairman of the Federal Reserve, said it was the Fed’s job to take away the punch bowl when the party was really warming up, and just over 40 years since Businessweek infamously pronounced the death of equities.

It would, I think, be fair to say that both comments are long forgotten. For most investors, equities are the only game in town precisely because the current Fed has pretty much said that far from taking the punchbowl away, it will pour in as much of the hard stuff as it can to keep markets partying. This is so it can pursue its asinine inflation target.