Yesterday's Wall Street Journal featured a piece called "Fed Officials Growing Wary of Market Complacency". The Journal says Fed officials "are starting to wonder whether the tranquility that has descended on financial markets is a sign that investors have become unafraid of the type of risk that could lead to bubbles and volatility." It continues, "Richard Fisher, president of the Federal Reserve Bank of Dallas, added to the chorus of concern over complacency in an interview Tuesday. "Low volatility I don't think is healthy," he said. "This indicates to me a little bit too much complacency that [interest] rates are going to stay at abnormally low levels forever." The article adds, "Fed officials face a double-edged sword. Officials want to keep interest rates low to boost economic growth and hiring and to lift inflation from levels below the bank's 2% target. But, having been burned by the risk taking that stoked the 2008 financial crisis, they are on the lookout for signs that the policies are having dangerous side-effects in financial markets." It also says, "It is a problem of their own making. They can't have it both ways," said Martin Barnes, chief economist at BCA Research, an investment-advisory firm. "If they want to sustain zero interest rates and push up asset prices, how can they expect to have that with no excesses and no risk taking?" In other news, a press release entitled, "SEC Charges Albany, N.Y.-Based Investment Adviser With Defrauding Clients" tells us (among other things), "The SEC alleges that Valente and ELIV Group attracted clients by falsely assuring them that the principal amount of their investments was fully liquid and "guaranteed" because it was backed by a large money market fund. Client funds were in fact never guaranteed or backed by any money market funds, and the majority of ELIV Group's investments were in highly illiquid investments in privately-held companies."

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