unfaire

Thursday Outlook: Commodities, Global Markets

The low interest rate of the Fed is hurting the economy! And, it is drying up the liquidity! Why?
If you are a small bank and having, say, $1 million of cash, would you lend it out today knowing Fed will have to raise the interest rate sooner or later when you will be able to make a lot more money at that time? You would just sit on it and do nothing. You won't finance a mortgage at today's rate and get stuck with it for the next 10, 20, or 30 years, if you think you can get better return after the Fed has hiked the rate.
On the other hand, the big investment bank turned holding banks take this costing-almost-nothing money and churn the stock market and making a zillions of dollars.
The net result is the this low interest rate is not creating liquidity. In fact it is hurting everybody except the big banks who can trade on their on account and those who have the gull to charge 30% interest on the credit cards.

Friday Outlook: Commodities, Global Markets

The following is just a mumbling from a stream of unconsciousness.
We had oil bust created by trading frenzy with volume far exceeded the oil inventory. Now we have option trading of all stocks with volume far exceeding the underlying stocks, not just U.S. stocks but also of stocks of the world all over through ETF and other means. Could there be a huge U.S. and world market bubble followed by a tsunami crash in not so distant future? It would take more than trillions to fix, more likely mega-trillions? Remember it was only billions just a few years ago?
With all this high frequency trading and other new market manipulations which we don’t know, has the fundamental of the market changed? May be Hal 9000 has already factored in all the technical analysis we now know and depend on and found a way to circle around us. The shares and the stocks are now just like the oil, which by the way is floating on the high seas by the boatloads, a mere trading vehicle to make money?