Dow was at 10,000 for about 6 seconds, but that is all we hear about from the talking heads on CNBC who haven’t put together that even though stocks have been on an unprecedented rally, your buying power has still declined and the real return in equities is still negative. Since they like to point to real and nominal returns in other investments, except for stocks, they are horrible at pointing out or even realizing that the dollar is getting pounded and that the rally is simply due to the dollar decline.
They haven’t even figured out that Intel’s (NASDAQ:INTC) earnings were what they were because the dollar has been debased. Did you hear them tell you that US demand for Intel’s products is down 2%? Nope. Will you hear them tell you about that? Not a chance because they want you to believe that the US is in recovery mode. They want you to believe that there are bubbles everywhere, in commodities, in bonds, everywhere except for stocks which are extremely over-valued based on current and even forward valuations.
Forget that JP Morgan (NYSE:JPM) is also reserving more for defaults and announced that prime mortgages are blowing up. Let’s just not even talk about commercial real estate defaults; they actually lied about that Tuesday, claiming there is no shoe to drop, when banks, according to several articles, are not writing down the bad debts. Credit card defaults are climbing and show little sign of stopping and all of the YoY comps on credit look horrible. They won’t tell you that because it’s Dow 10,000 time again!
Even at this moment they are pointing out that ETFs are driving commodities higher and that they are not an asset class. What they do not tell you is that there are more mutual funds than there are stocks traded on the exchanges. At their peak, there were some 6,400 hedge funds available, an enormous number that influenced the markets in ways we will never really know. What is absolutely clear is that these clowns, and they are clowns, do not understand much of anything about the markets and how they work. They warn you about chasing performance in gold or commodities, but buy stocks all day long, from 14,000 to 13,000 to 12,000, to, well you get the point.
Is it no wonder that their ratings are slipping so badly? Typically when a channel is in its death throes, they bring on Heather Locklear, but not CNBC - they bring on Michelle Caruso-Cabrera. This woman’s only redeeming quality, and it is not her unbridled free market ideals, which she mutilates daily in the most perverted of ways, is her, well, other womanly attributes. Other than that she has no idea what real life is like and believes that the free market can answer all of life’s complicated questions, like health care. Michelle, until you try and buy health care making only $75K a year without an employer sponsoring it, you should really just shut up because it costs about $2K a month and is not affordable. The free market fails us there versus an employer sponsored plan which has the power of numbers and discounting. She needs to be fired to learn all of this first hand, in my opinion.
A little bit of knowledge is dangerous, but no knowledge at all is just sad and when you sit her next to Dennis Kneale, the stupidity goes nuclear. I do not know how Bill does not go home and drink himself into a coma every night; the pay cannot be that good. Anyhow, the Dow 10,000 wasn’t that exciting the first time around since it was a bubble then, and guess what? It is not exciting now because it, so far, hasn’t stuck and is a bubble again.