Stock Market QuotesJim Edwards of Business Insider reports that Central Bank Analysts say stocks are in “euphoric” territory and we are screwed when the recession hits.

The announcement concerning world stock market valuations from the Bank for International Settlements (BIS) is especially troubling. The BIS is a prestigious and important world financial oversight body.

Instead of trying to summarize the crisis that the market is facing, let the words of other self-proclaimed experts suffice. Frankly, they may be right and your American Patriot Daily wants to make any and all credible source information available to you.

In a June 30th article Jim Edwards writes the following about BIS:

The Bank for International Settlements — the Swiss-based financial institution that acts as a counterparty to national central banks — has declared that the stock markets are in a “euphoric” state and has urged central banks globally to begin tightening interest rate policies now while economies are growing rather than wait for another recession, when it will be too late.

These are scary words coming from a set of economists whose job it is to monitor how capable central banks are in responding to economic conditions with flexible monetary policy.

The subtext (and not so subtext) of BIS’s annual report is that, because many central banks have reduced interest rates to zero — the U.S. and Japan included — they are without weapons to boost the economy should another crisis hit. You can’t go lower than zero, basically.

These words from the BIS ought to terrify anyone who thought central banks were unprepared for the last recession in 2007, when U.S. interest rates were “high” at about 5.3%.

Writer Michael P. Regan of Bloomberg News agrees in a June 27th article titled, “By the Time You Know Stocks Are in Correction It’ll Almost Be Over.” Regan writes the following:

One thing making people nervous about stocks these days is the fact the U.S. market has gone more than two years without a correction, or a 10 percent drop.

It just doesn’t feel right. Sort of like going two years without changing a car’s oil, or two days without brushing your teeth, or two paragraphs into a column without a good metaphor.

The last major dip for the Standard & Poor’s 500 Index (SPX) was an 11 percent drop from its intraday high on April 2, 2012, through its low on June 4, 2012. This year, the closest it’s come was a 6.1 percent slide from the middle of January to early February and a 4.4 percent decline in April.

The suspense is building because of presumptions that corrections are inevitable, even healthy, parts of bull markets. Are they? Maybe. But good luck trying to predict them.

“Investors and analysts of all shades and sizes are obsessed with the idea of a correction,” Birinyi Associates Inc., a money management and research firm led by Laszlo Birinyi, wrote in a note to clients yesterday. “We have always held that these efforts to foretell a correction are in vain.”