KSengineer

Key Factors Driving the Market

Can someone explain this "sideline" money to me. Every time a stock is sold, an equal amount of money is exchanged. For every dollar going to the sidelines via a sale, a dollar must come from the sideline via a purchase.

I can understand money flowing from bonds to stocks, or cash being added to workers 401k's each month or companies purchasing their own stock.

What am I missing? What is meant by "sideline" money?

On Jul 23 09:08 AM Roger Knights wrote:

> Don't forget money on the sidelines as a driver.

Anatomy of a Giveaway, Or Why Stocks Soared Yesterday

The only way for everyone to come out a winner is if the asset value eventually returns to it's full price. Since the government probably can not cause another credit bubble to push prices back up, the tool they have control over is inflation. Just hold the asset for a few years while Ben inflates the currency. The private investor wins big. The government escapes it's debt. The big problem is dealing with our foreign investors. Maybe that's why the Chinese are currently buying up California real estate by the bucket load.

What Happened to Demand?

Excellent article that hits the nail on the head. It also implies the solution. Since credit created this problem, creating more credit is obviously (or should be obvious) not the solution. We must return to a lower, safer level of credit. Therefore, we must recede, regress (recess). I think we should focus on accepting this recession as a good thing that will return our economy to a stronger, healthier level which will bring a better future. Rather than trying to reverse it's effects, we should focus on programs to help us get through this without destroying the innocent.