- overvaluation – when stocks are selling at dangerously high price-to-earnings ratios;
- "A can't-lose, stocks-can-only-go-up" mentality also signals market mania and trouble ahead;
- the onset of economic recessions and job losses, frequently preceded by a sharp rise in interest rates;
- less frequent are unexpected events with shock value, known as "black swans," which rattle investors.
"We've changed and impacted the markets because of our intervention and I understand there's sensitivity, but markets should also bear in mind that this program cannot go on forever."
"Everyone has had ample warning that the Fed is going to taper quantitative easing. And the markets can expect to see it happen in the next couple of months."
"We know we're going to have tapering. We know we're living in an artificial state of excess liquidity right now. If someone is surprised by this over the next couple of months – and it will occur over the next couple of months – then shame on them. There's been plenty of warning here."