Bad news is good news. Heads I win, tails you lose. Markets rise on good news, markets rise on bad news. Stock markets rise regardless of reality. And stock markets have been preordained to have only one direction: up up and away!
Reason? Bad news have been perceived as opportunities for the provision of more steroids by US FED to the steroid addicted Wall Street
From Bloomberg
U.S. stocks rose, with the Dow Jones Industrial Average capping its best week since January, as disappointing economic data fueled bets that any Federal Reserve stimulus cuts this month would be moderate….Investors, who have been scrutinizing economic data to determine whether growth is robust enough for the Fed to slow stimulus following its Sept. 17-18 meeting, will see a reduction next week as no big deal, according to a Bloomberg Global Poll of investors.
Like in the Eurozone, markets rose on disappointing data…
A Commerce Department report today showed retail sales in the U.S. rose 0.2 percent, the smallest increase in four months and below the 0.5 percent advance seen in Bloomberg survey. Wholesale prices in the U.S. rose more than forecast in August, adding 0.3 percent on higher costs for food and some fuels.A separate report showed inventories at companies increased more than forecast in July, trailing a gain in sales that signals a pickup in factory orders. The Thomson Reuters/University of Michigan preliminary September index of consumer sentiment fell to 76.8 from 82.1 last month, which was the lowest since April.
Whatever the data, there has been no stopping the bulls…
Dow Jones Industrial spiked by 3.04% this week.
S&P 500 zoomed 1.98%
By surging 1.7% Nasdaq reached milestone highs
The Russell 2000 approaches the recently etched record highs up 1.24% for the week.
Dow Transports has also soared by 2.4%
US stocks continues to rise even as oil remains at $108 bbl
…and even as bond vigilantes hound on the global bond markets.
Lately the mainstream have chimed to say that the economies of US, Europe, China and Japan will come to save the day for Emerging Markets and Asian economies.
But evidences increasingly suggest that these claims may be overestimated or exaggerated. They may even have been orchestrated to juice up markets in order to buy off time from any impending risks of a crisis.
What has been real has been that FED steroids will continue to enforce a transfer of wealth from the main street (one recent symptom: sluggish Small Business activities) to Wall Street; thus the growing parallel universe.
And Wall Street (and their global counterparts) will surreptitiously desire for the sustained laboring or drudging by main street so that the steroids will keep flowing to former. So the politically privileged Schadenfreude Wall Street benefits from a parasitical relationship enabled and facilitated by the US government channeled through the stock markets.
Of course, US stocks may continue to zoom higher. They could even rendition a Venezuela where stocks have been going only in one direction.
The Caracas Index has been up a stunning 223% year to date (Friday’s close) and 523% from 2012 in nominal local currency terms.
The difference is that rising stocks in Venezuela has been symptomatic of a more chronic-terminal form of inflationism: hyperinflation via a massive devaluation or a crashing currency, the bolivar.
In a lot milder form of inflation rising US stocks in departure with reality (George Soros’ reflexivity theory: the widening divergence between reality and expectations and the flaw in perceptions) are symptoms of a deepening mania or the Wile E. Coyote Moment.
And it seems that investing gurus like Warren Buffett, George Soros and John Paulson has been in a liquidation mode too in a race to store up on cash.
We understand how bubbles operate, as Newton's third law of motion remind us "every action has equal and opposite reaction": the higher the rise, the steeper the fall.
1 comment:
On Friday September 13, 2013, five years out from the financial crisis, liberalism has produced peak prosperity with World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rising to all time highs.
Margin credit drove World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, to their all time highs. In the US, VTI, the Russell 2000, IWM, and the S&P 500, SPY, rose for all practical purposes to their all time highs. It has been margin credit coming from the leveraged speculative investment community, specifically Regional Banks, KRE, such as RF, the Too Big To Fail Banks, RWW, such as BAC, Asset Managers, such as BlackRock, BLK, Stock Brokers, IAI, such as ETFC, as well as a topping out of the Euro Yen currency carry trade, that is the EUR/JPY, that has given seigniorage, that is moneyness, to the Russell 2000, IWM, and the S&P 500, SPY, as is seen in the ongoing combined Yahoo Finance Chart of IWM, KRE, SPY, and RWW. Of note, Biotechnology, IBB, Casinos and Resorts, BJK, and Semiconductors, SMH, soared this week, as Volatility ETF, XVZ, and the Market Off ETN, OFF, traded near their all time lows.
There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO. And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.
The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.
Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW. Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.
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