The Fed: Sending Investors to the Slaughter? 13 comments
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By Simon Avery
Why do the markets enjoy the hardship of others?
Specifically, why does news that last month that 190,000 jobs disappeared in the U.S. and another 43,200 vanished in Canada spur stocks? North American markets rose in early trading before going almost flat before noon. So how sadistic are these capitalists?
Well, for one good explanation it’s worth turning to the Pragmatic Capitalist, a much-loved blog on the markets. PC argues that the U.S. Federal Reserve’s policy of anemic interest rates is forcing investors to incur greater risk because traditional safe havens like insured bank accounts and government bonds don’t offer any return to speak of. Fed chairman Ben Bernanke is essentially pushing investors into the stock markets to find any sort of returns. As the markets keep rising, investors are buying into “Bubbly Ben’s” idea that a country can print its way to prosperity.
“The real question investors need to ask themselves is this: if we truly are in the middle of a Fed-induced liquidity rally where the fundamentals simply don’t matter, do you buy now or wait it out for the inevitable bust?”
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This article has 13 comments:
Once this scenario was established, the smart investors are betting for the dollar to go lower...In this case the entire equity market is on the auto pilot to go higher due to the future inflation/reflation.
Do not be surprised if the market keep going higher, in fact all equities should double or triple in few years......Look for Gold prices to confirm the direction of the market.....
As long as Dollar is down, Gold is going higher, there is an ample room for equities to go much higher.....
Gold is a good place to wait.
The game is fixed. The richer get richer. And the poor get to pay for it. Is this what Feudalerism was supposed to be when the Founding Fathers created our nation? I think not.
Turn out the lights on the rich man's party. And let's start all over again, rebuilding from the ground up.
On Nov 06 12:33 PM socrateaz wrote:
> Do you understand that socialists are basically me people? They
> want to have what others have without puting out the effort to get
> it. They call people who acheive to get ahead greedy while they
> want others to supply their wants with little effort. They hide
> behind fairness as a goal. But when you look at socialist leaders.
> You will see them support some to a greater degree than others.
> For Socialists to exist they need to blame hardships on unfairness
> of others. When enough become true socialist a true failed economy
> will emerge. All expecting the other to support them. Courts often
> push socialism because they really believe fairness is in equality.
> And equality is in redistribution because those who are 20% responsible
> and have the funds should be held 500% responsible for what happens
> to those 80% responsible but with no funds. Court logic! Socialism
> is making others responsible for the bad things that happen to me
> while taking credit for anything that appears to be my success!
> Just need to understand the logic to understand the actions taken
On Nov 06 12:33 PM socrateaz wrote:
> Do you understand that socialists are basically me people? They
> want to have what others have without puting out the effort to get
> it. They call people who acheive to get ahead greedy while they
> want others to supply their wants with little effort. They hide
> behind fairness as a goal. But when you look at socialist leaders.
> You will see them support some to a greater degree than others.
> For Socialists to exist they need to blame hardships on unfairness
> of others. When enough become true socialist a true failed economy
> will emerge. All expecting the other to support them. Courts often
> push socialism because they really believe fairness is in equality.
> And equality is in redistribution because those who are 20% responsible
> and have the funds should be held 500% responsible for what happens
> to those 80% responsible but with no funds. Court logic! Socialism
> is making others responsible for the bad things that happen to me
> while taking credit for anything that appears to be my success!
> Just need to understand the logic to understand the actions taken
The main problem remains to be the jobs, and housing......banks can not survive without housing and zero interest rates, ........The dollar is being used as a carry trade (borrow dollar at low interest rate.....And invest it in other countries or commodities for higher return).
This means there are more bubbles to develop around the world........2010 will be much worst than 2009.........Expect to have lower home prices and get ready for crash of commercial loans ....
The only safe haven is Gold (in a long run) and any hard asset
In anycase, I do agree that ridiculously low money market interest rates are partially responsible for the interest in the equity markets. I dunno whether that has anything to do with the market going up or not. There is still a ton of cash on the sidelines after all.
-Matt
-Matt
The Joint Overheated Waffle Iron Survey predicts the
same Fahreheit 451 the survey results have been pegged
at since first gathered in the Kennedy Administration,
resulting in the building code requirement of hard-wired
smoke alarms in all new construction. They recommended
remote monitoring of all new and existing alarms be
consolidated at the Federal Reserve along with all things
regulatory, aside from their morning constitutional or
anything constitutional.
In testimony before Congress, Chairman
Barney "Brutally" Frank tabled the proposal, displaying
more interest in the brutality than the frankness upon
upon which the TV Parental Guidelines Council promptly
and finally jerked C-Span's general audience rating
after years of complaints from any mature, thinking adult
of the need to shield their eyes from that network.
Investors examining the Waffle Iron report and stymied
by years of the casino lobby failing to enact meaningful
online gaming reform, perennially outbid by the deeper
pocketed financial services sector, placed their bets
on red, black or aiming in the general Direxion of the
bull's eye, double-00 and triple-000 lever actioned,
double-barrelled rushin' roulette figuring that with most of
the buck shot hitting home, what with The Family moving
back in, everyone must still be Fed.
www.kids-safety-klub.c...
The government is at the mercy of central bankers with their lobbyist hard at work to implement what ever means to save the world economy from collapsing due to the unregulated CDS of over 500 trillions..... No single government or country could handle the unknown value of the outstanding derivative...They will create more bubbles and hard at work to inflate their way out of this mess even if it is temporary.
The ultimate goal is to devalue the dollar for a while and create new bubbles by using the dollar as a carry trade.
considering it's been generally reported that the retail investor is largely missing from most the recent rally, as are many institutional investors, with most the buying done by the few, and more than a few of that few using tax payer monies to drive the market up, i'd say...
save what you have, or cash out your profits, "maybe" have a few shorts, but generally, wait it out....