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The government is too big. That means too much money, patronage, political favors (more money) and bad programs like Fannie (FNM) and Freddie (FRE). Corruption and scumbags like Rahm Emanuel, per this story in Chicago Tribune, are the end result. (Yeah, yeah, yeah… the GOP has its share of scumbags as well.)
The news is bleak and disheartening but the tape is downright cheery. Which matters more? For us it must be the latter although we’re intrigued by the accuracy of DeMark’s monthly indicator signaling a potential change of direction.
The Treasury sold $57 billion in bonds while the Fed bought $33 billion. The money from the latter is propping both bonds and stocks since what would the sellers do with the money? Buy bonds? Silly isn’t it? That money may be routed to trading desks where they (wink, wink) know what to do with it.
With the end of month upon us very soon and the G-20 meeting on tap, window dressing is on the front burner. Be careful out there with markets overextended.
I’d say the efforts of authorities to “stabilize” markets are working; however, they haven’t “fixed” a thing, that’s for sure.
Let’s see what happens. Have a great weekend.
Disclaimer: Among other issues the ETF Digest maintains positions in GLD, DGP, DBP, DBB, DBC and USL.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward.
