Futures were lower by 60; now they’re slightly higher. This banana run we’ve been on has instilled a sense of entitlement amongst traders, something unseen since 2013. Both 2014 & 2015 were abysmal years, both taxing and filled with misdirection. Aside from the first 5 weeks of 2016, this has been a bullish traders nirvana.
Traders have enjoyed melt up after melt up, with very little repercussions or reprisals. There have been very few pullbacks since February and people are starting to get bold again. The run in crude stocks, as oil idles itself in the low $40s, is absolutely asinine. I see what’s taking place in the market and can’t help but to shake my head–because I know what’s coming next.
None of this propping up can hold. The recovery story is a lie, always has been. It was fun playing the POMO game, pretending that the economy was pistol hot–but it wasn’t. Financial engineering can only take you so far. All hope and responsibility for a prosperous economy has been laid to rest at the feet of the federal reserve. There is nothing left for our politicians to do, as they’ve spent the treasury and more. Fiscal disaster is all but a certainty for a number of western economies, as well as China.
The prime risk to the market is recession during a time of stark fiscal uncertainty, the sort of debt to GDP that disables government from stimulus spending. Sadly, that’s the position we’re in, defenseless spendthrifts hanging onto every word of our Fed overlords, who all but control our economy and country by controlling the supply of money.
Does this seem healthy to you?
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Well that put me in a good mood.
lol
Showtime approves…
May 1st, Penny Deads is back
Yes!!!
Eva Green is ridiculously hot.
Price action trumps all else. Buy the open….
Obama to Yellen: I don’t have a very good legacy, prop the markets up until I’m out and then do whatever.
Yellen to Obama: Ok.
Totally agree Senor Fly. But your post was just as true in mid 2013 (or earlier) and look how much further we have run up. This is the end of a Kondratieff wave.
Gazundheit!
which part of the wave are you referring to?
http://www.marketwatch.com/story/saudi-arabia-set-to-secure-10-billion-loan-amid-crude-oil-slide-2016-04-20
Congress may not love Saudi, but the big banks do. Or maybe they just love profit.
Very Denninger-esque…
Is this Bluestar?
I wish you’d explain your reasoning fly. You looked real good for a while, but now you’ve got quite a few hints that this bear thesis failed to materialize. There’s nothing bearish in the market as you said. And that’s new. Just because it’s new doesn’t mean you should discard as an aberration. It could possibly be the beginning of a new bull market of some sort. You’ll feel much better trust me.
If the market is propped up by financial engineering, in other words, by manufacturing value that doesn’t actually exist, then I suppose, if better methods of financial engineering are invented, the market could rally long term.
Exactly.
I’ve noticed a growing number of posters that are leaving the Ark (or refusing to board), based on the belief in the bullish market, but not a bullish economy.
Now it is possible that the economy isn’t going to fall apart and may amble on slowly. However, in the case that it declines (ie, earnings continue to fall in Q2), then financial engineering can only postpone the inevitable and magnify the magnitude of the crash. We could be in 1998/99 instead of 2006/07
Very possible.