Lewis thinks high-frequency trading rigs the market against
individual investors, while Yardeni thinks massive central bank
easing rigs the stock market in favor of all investors.
"These markets are all rigged, and I don't say that critically,
I say that factually,"
Yardeni told CNBC.
"We have to deal with what it is, and the reality is I love the
central bankers. They've been good to the stock market."
The S&P 500 index has tripled over the past six years amid the
expansion of the Federal Reserve's balance sheet to $4.5
trillion.
It also has kept short-term interest rates at almost zero during
that period. And many economists interpret the Fed's policy
statement Wednesday as signaling it won't start raising interest
rates until September.
"This is not about investing, this is all about the central
bankers," Yardeni said.
To be sure, when the Fed finally does raise interest rates,
there could be heck to pay in the stock market, says Ray Dalio,
founder of Bridgewater Associates, the world's largest hedge
fund manager.
Indeed, we could see a repeat of 1937, he and colleague Mark
Dinner wrote in a note to investors obtained by the
Financial Times. In that year, the Fed tightened policy
prematurely after the crash of 1929. This led to the Dow Jones
Industrial Average falling by one-third in 1937 and continuing
to decrease in 1938.
"We don't know — nor does the Fed know — exactly how much
tightening will knock over the apple cart," the duo said.
"What we do hope the Fed knows, which we don't know, is how
exactly it will fix things if it knocks it over. We hope that
they know that before they make a move that could knock over the
apple cart."
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