London Daily

Focus on the big picture.
Friday, Oct 02, 2026

There’s a ‘mania’ in stocks, but investors face an even greater danger, warns Nobel Prize-winning economist

There’s a ‘mania’ in stocks, but investors face an even greater danger, warns Nobel Prize-winning economist

Paul Krugman says the “fear of missing out” is driving this market ever higher, even though the risks continue to mount.
That’s Nobel Prize-winning economist Paul Krugman explaining to CNBC why the “fear of missing out” is driving this market ever higher, even though the risks continue to mount.

Indeed, the S&P 500 SPX, -0.64%, shrugging off the rising number of U.S. coronavirus cases, has benefited from a sturdy run in technology stocks to a gain of more than 6% over the past month.

“[Tech stocks] are riding on the prospects of economic recovery in Asia and Europe even as the U.S. completely mucks things up,” Krugman said, adding that many retail investors have been drawn into the equity markets due to a lack of alternatives, such as the historically low-yielding bond market.

While many pundits are quick to blame the Federal Reserve for inflated stocks, Krugman told CNBC that he doesn’t see how the central bank had much of a choice.

“They could not have stood by and allowed a financial crisis on top of the viral crisis, so this is what had to happen,” he said. “And if there’s some mania in the markets, well that’s what happens.”

The way things stand now, the national debt isn’t much of a concern for Krugman, who said a big infrastructure program is a “no-brainer” for policymakers. “At this point with everything else going on, the great danger is that we spend too little, not too much,” he said.
Comments

Oh ya 6 year ago
The US government is the main driver of the market . They are now buying junk bonds trying to keep this going until maube after the election or maybe until it just explodes. They are dumping 9 billion a day. This will end in tears

Newsletter

Related Articles

0:00
0:00
Close
UK Councils to Receive Sweeping Planning Powers to Ban New Vape and Betting Shops
Chancellor John Healey Faces Tax and Pension Scrutiny Ahead of Autumn Budget
Metropolitan Police Apologise for Accidental Disclosure in High-Profile Investigation
UK Universities Report Record International Enrolment as Housing Pressure Grows
UK Logistics Firms Monitor Rhine Disruption as Low Water Threatens European Supply Chains
UK Food Industry Warns Inflation Could Approach 7%
UK Introduces Vaping Duty and Mandatory Retail Stamps
Scotland Raises Property Taxes and Expands Child Payment in Annual Budget
Greggs Plans Four Factory Closures With 740 Jobs at Risk
OECD Raises UK 2026 Growth Forecast to 1.1%
UK Inflation Rises to 3.1% as Bank of England Faces Rate Debate
Andy Burnham Criticises Brexit and Says Rejoining EU Single Market Remains an Option
UK Imposes New Sanctions on Russian Military Networks and Propagandists
UK Launches Nationwide Early-Release Prison Scheme
Andy Burnham Says Security Services See Signs of Iranian Involvement in RAF Fairford Incident
Manchester City Found Guilty on Premier League Financial Charges After Independent Investigation
Scottish Court to Rule on Bid to Force No-Confidence Vote Against Aberdeen Council Co-Leader
UK Bans Extra Charges for Seating Children Under 12 Beside Accompanying Adults
UK Introduces Vaping Duty and New Licensing Requirements
Greggs to Close Four UK Factories and Cut 740 Jobs
Hundreds of Prisoners Released Early as England and Wales Prisons Reach 98% Capacity
UK Unveils New Russia Sanctions Targeting War Funding and Shadow Fleet
Burnham Says There Are Strong Indications of Iranian Involvement in RAF Fairford Security Breach
Prime Minister Andy Burnham Raises Prospect of Reviewing Britain's Post-Brexit EU Relationship
Markets Price in Bank of England Rate Increases as Inflation Rises to 3.1%
UK Borrowing Costs Climb Toward 5.5% as Global Bond Sell-Off Intensifies
UK-France One-In-One-Out Migration Agreement Expires as London Seeks Alternative Measures
Southwest England Faces Flood Alerts After Heavy Autumn Storms
UK Expands Funding for Rapid Electric Vehicle Charging Infrastructure
Welsh Government Approves Funding to Upgrade South Wales Transport
Northern Ireland Tensions Rise as Orange Order Rejects Drumcree Compromise
NHS Leaders Back Early Design of Proposed National Care Service
More Than One-Third of Regional UK Universities Face Financial Deficits
UK Current Account Deficit Narrows as Cross-Border Financial Flows Remain Strong
Bank of England and FCA Issue New Rules for Stablecoins and Digital Assets
MI5 Warns UK Universities Over Research Links With Chinese Institutions
UK Energy Price Cap Rises 4% as Electricity VAT Is Temporarily Suspended
Equity Calls for UK Personality Rights to Protect Performers From AI Replication
OpenAI Pauses Advanced Model Training Following Safety Concerns
Scottish Government Proposes Replacing 32 Councils With Larger Regional Authorities
Ofgem Raises UK Household Energy Price Cap by 4% From October
UK Counter-Terrorism Police Continue Investigation After Five Arrests Near RAF Fairford
OECD Cuts UK 2027 Growth Forecast to 1%
Labour Says State Pension Triple Lock Remains Protected Through Current Parliament
Andy Burnham Pledges National Care Service With Free Social Care in England
Six Flags Permanently Shuts Landmark X2 Roller Coaster Following Safety Scandals
Metropolitan Police Rule Out Terrorism in Golders Green Stabbing Investigation
Lithium-Ion Battery Identified as Cause of Fatal Merseyside House Fire
UK Department Rejects New Sea Use Framework Due to Stakeholder Fatigue
Major Thames Water Pipe Burst Causes School Closures in London
×