The news that Australia was raising interest rates got bulls seeing more green shoots and thinking the recession is over. The other news was front-running anticipated good earnings from Alcoa (NYSE:AA) tomorrow, more dollar trashing and rising commodity prices emphasizing precious metals.
One of the better bloggers lately has been from Jesse’s Café Americain. He wrote several great articles today and you’re encouraged to read all of them. One features a lead, “If things are so bad, why is the stock market going up?” And he continues:
“There is no doubt that equity markets, judged in nominal terms, can do amazing things when the Fed spikes the punch bowl with grain liquor. Especially when market regulation has been weakened by decades of mistaken ideology and corruption. Bull markets are generally corrosive of the average intellect. That is why statists with something to hide love them so much. No matter what era, people willingly surrender their common sense to the bubble, if only for pragmatic reasons.” Continue reading…
Jesse believes, as do I, that the demise of Glass-Steagall had much to do with our current problems later abetted by enablers like Greenspan, rating agencies, mono-line insurance companies and Wall Street new product engineers (subprime mortgages). I would add to this the CRA (Community Reinvestment Act) which mandated home ownership for those who previously didn’t qualify. And, if you can believe it, this is being touted for expansion in Congress!
So, we get earnings tomorrow and most expect them to be good by their reckoning. For us, it’s just about the tape which seems one day bearish and the next bullish.
Okay, so let’s see what happens with earnings. Follow our intraday comments on twitter.
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