There is only one direction for stock markets in the US or elsewhere. That is UP UP and AWAY!
Good news equals rising stock markets. Bad news also equals rising stock markets.
Bad news is good news, from Bloomberg
Speculation slower growth in hiring will extend Federal Reserve stimulus lifted U.S. stocks and pushed the annual advance in the Standard & Poor’s 500 Index within a percentage point of the best yearly gain in a decade.The S&P 500 rallied as much as 0.8 percent today, boosted by speculation the Fed will delay curtailing its monetary stimulus after payrolls in the U.S. climbed by less than forecast in September, indicating the economy had little momentum leading up to the 16-day shutdown of the federal government. The jobless rate fell to an almost five-year low.
Bad news is good news because of the chronic addiction to debt-inducing stimulus.
Record S&P 500
Record small cap Russell 2000
Up, up and away extrapolates to a parabolic climb for both the S&P and Russell 2000
US PE ratios as discussed last weekend. From the Wall Street Journal:
Skyrocketing P over E. Shrinking dividend yields.
So how can things ever go wrong?
So how can things ever go wrong?
As the great Ludwig von Mises warned:
For the naive mind there is something miraculous in the issuance of fiat money. A magic word spoken by the government creates out of nothing a thing which can be exchanged against any merchandise a man would like to get. How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's Treasury Department! The government, professors tell us, "can raise all the money it needs by printing it." Taxes for revenue, announced a chairman of the Federal Reserve Bank of New York, are "obsolete." How wonderful! And how malicious and misanthropic are those stubborn supporters of outdated economic orthodoxy who ask governments to balance their budgets by covering all expenditures out of tax revenue!
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Financial marketplace trading evidenced liberalism's peak nation state sovereignty, seigniorage, and moral hazard based prosperity, as its Krugmanomics here, and Abenomics, as well as Draghinomics, over there.
Liberalism attained peak prosperity on global currency carry trade investing and a pursuit of yield. Both of liberalism’s spigots of investment liquidity were open full wide. Said another way, the financial markets were under total leverage as evidenced by the Euro, FXE, Ultra Junk Bonds, UJB, and Leveraged Buyouts, PSP, rising strongly, and the US Dollar, $USD, falling strongly lower.
Currency traders bought all of the major world currencies, DBV, such as Swiss Franc, FXF, 0.8%, Euro, FXE, 0.7%, The Swedish Krona, FXS, 0.6%, The British Pound Sterling, FXB, 0.5%, and The Australian Dollar, FXA, 0.5%, as well as emerging market currencies, CEW, such as The Brazilian Real, BZF, 0.6%, and The Indian Rupe, ICN, 0.4%.
The Japanese Yen, FXY, rose only a meager 0.05%, enabling a stunning leverage to those invested long risk assets, such as Biotechnology Stocks, IBB, Nation Investment, EFA, such as the Philippines, EPHE, and European Financials, EUFN, such as the National Bank of Greece, NBG, and Ireland’s Bank, IRE.
The monetary policies of the world central banks, have produced fully produced Krugmanomics here, and Abenomics. as well as Draghinomics, over there. The strong rise in Major World Currencies, DBV, and Emerging Market Currencies, CEW, drove World Treasury Bond, BWX, and International Corporate Bonds, PICB, to new highs.
The flurry of currency leverage and debt leverage caused the US Dollar, $USD, UUP, to plummet to close at 79.29.
World Stocks, VT, rose a solid 0.7%.
Asia Excluding Japan, EPP, and the Eurozone, EZU, led World Stocks, VT, higher. In Asia, the Philippines, EPHE, New Zealand, ENZL, Turkey, TUR, Thailand, THD, Malaysia, EWM. and Australia, EWZ, KROO, led the way higher. In Europe, Germany, EWG, EWGS, the Netherlands, EWN, and Italy, EWI, led the way higher. Argentina, ARGT, continued to a new rally high.
Both Ireland’s Bank, IRE, and the National Bank of Greece, NBG, rose strongly, to new rally highs, as the European Financials, EUFN, rose, taking the Eurozone Stocks, EZU, higher, all on the, EUR/JPY, carry trade, which to close higher at 135.98, as the Euro, FXE, at 136.34, and Yen, FXY, at 20.71. The Elliott Wave Surfer chart article of the EURJPY communicates an Elliott Wave 5 High has been achieved in liberalism’s great mover of stocks.
The vertical rise seen in the chart of the EURUSD, coming on news that the ECB names 124 European Banks for supervision, is truly stunning, and the parabolic rise in European Financials, EUFN, as well as nation investment in Ireland, EIRL, and its bank, IRE, marks the zenith of Liberalism, as the age of investment choice, which was based upon schemes of currency carry trade investing, and central bank credit.
The Speculative Leveraged Investment Community, consisting of the Too Big To Fail Banks, RWW, Investment Bankers, KCE, Stock Brokers, IAI, European Financials, EUFN, Emerging Market Financials, EMFN, Chinese Financials, CHIX, Regional Banks, KRE, and Asset Managers, such as Blackrock, BLK, have produced a terrific moral hazard based peak prosperity.
Peak fiat wealth was achieved on October 22, 2013. The strong trade lower in the US Dollar, $USD, to close at 79.29, and the strong rise in Nation Investment, EFA, and Global Industrial Producers, FXR, marks the zenith of Liberalism's Milton Friedman Free to Choose Floating Currency Banker Regime, and the achievement of peak democratic nation state sovereignty, and banker driven seigniorage.
Out of a soon coming Financial Apocalypse, foretold in bible prophecy of Revelation 13:3-4, authoritarianism's Beast Regime of regional governance and totalitarian collectivism will provide regional nannycrat sovereignty and their diktat driven seigniorage.
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