I’m not sure that you’re aware of exactly what is going on, but it is a mess out there. You wouldn’t know it watching the stock market, gently RISING up 100 on the day.
Europe is being overthrown in a bloodless Banker’s Coup d’etat. Things will either fall firmly under Teutonic Control or all Hell will break lose and there will be a historic run on the banks. Perhaps both will happen.
Over here, another multi-billion dollar criminal brokerage flush has occurred and regulators are nowhere to be found. Plus the economy really sucks for the 99%. Even Widows and Orphans who live on the interest are hurting, big time.
Yet, throughout it all, the markets digest their historic October run and the Dow trades just 17% from all time highs. Replicate October’s run and we will be at record highs. Chew on that for a moment.
Commodities have spiked higher on the “secret” Fed stimulus and the promise of bailouts. But other than fear dominating the gold, silver and oil markets, who exactly is consuming these high priced commodity products? They are not being used, instead they are being stockpiled as a store of wealth, just in case. And through it all, the stock market saunters around recent highs.
After momentus and historic market velocity, its time for the markets to chill the fuck out. Even in 2008’s disaster, the holiday season was stable. And how can prices be justified at this time? They don’t have to be. That is the logic of a market that now functions despite itself. There is no earnings season to contend with. Just the hope of more Central Bank Intervention, bailouts, stimulus, etc. etc. etc. There is no organic growth, only false and manipulated numbers. The reality is that we are about to undergo shrinkage. Politicians, Economists, and Wall Street Prognosticators will have to come to terms with this.
The way to play is to look for already lowered expectations. Most will have not-so-great charts. But if you’re buying a “good chart”, you will be bagged 75% of the time going forward.
Who knows? Maybe buy and hold is ready to make a comeback!
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This is why I am mucking in the mud with stuff like DRYS and UNG. I mean, how much worse can they get?
before going all “the fed is the devil” again, fellas, I would note the following:
Europe has been conducting QE
Britain just announced $150B of QE or so
Japan has been deficit spending in excess of its norm and may have announced some QE also, but I don’t know that.
So if a QE-like action is afoot, it doesn’t have to be “super-d-duper evil clandestine secret QE”, the same net effect can be affected by QE elsewhere in the world.
QE works like this: the fed buys bonds from people, giving them dollars. Its an asset swap, nothing more. IT doesn’t print money, it doesn’t FORCE people to speculate in the commodity markets, but it hands them a bunch of idle reserves and they tend to go chasing some kind of a return with them.
If i could give you a gold star for this post I would. The old school just doesn’t understand this shit for what it is.
There will be shrinkage, but before that there will be major inflation in commodities. This is 2007/2008 all over again.
“gently falling down 100 on the day” – yeah, just before Twisting up 184 points on the day.
In my business I have to buy lots of stainless steel. In late 2009 I bought it for $2.96/lbs and now I have to pay $6.32/lbs. I’m telling you prices are going to explode recession or not.
“Over here, another multi-billion dollar criminal brokerage flush has occurred and regulators are nowhere to be found.”
This is exactly why I wish we’d get a clue from the Brit’s FSA… Keep traders funds separated from the brokers.