It seems that most market participants know the Construct from which current markets operate. It’s all done with a wink and a nod.
Forget about the Propaganda or news. Just know that an over-leveraged and over-indebted economy cannot be fixed with more leverage and debt. Yet that is precisely what the answer to our problems has become. Simply buy up the old debt with freshly created money and issue new debt.
It seems that nobody gets hurt and everyone wins. The equity and commodity markets seem to think so.
And why not? Trillions of newly created dollars were/are being pumped into a closed loop system, with the cash never to see the light of day. Inflation? It only comes from fresh money chasing hard assets and prices do not reflect the supply and demand dynamic. But its OK because the money has to go somewhere.
Today, Texas Fed-head Fisher talks about the endless drug of stimulus and how it effects the marketplace. The speech was picked up by Zero Hedge and the introduction plainly states the obvious: that markets simply have a Pavlovian Response to the Fed’s stimulative actions. Where have I heard that before? PAVLOV1 PAVLOV2 PAVLOV3
It is always nice to see our ideas being put forward by others far more important to the investing scene than us.
How does this phase end? April 15th
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That means we got a good 30 days to buy all dips and make more money! Wheeeee
(laughter) I wish I could see the video from the meeting where the academics stopped and said, “wait, why are our models so far the fuck off!?”
You cannot possibly control a system as dynamic as a market when every single individual in that market is watching your everymove.
Negative. Feedback. System.
Non-linear.
Complex.
I don’t care how you describe it. Call it what it is: everyone’s just playing off Bernanke. But there’s no way they’ll ever get their desired outcomes when each initiative is front-runned by a hundred billion dollars of oil purchases.
Gosh Darn Tootin!
Scott,
Can you comment on oil prices? Do you oil has been financialized and is now spiking on nothing. Demand is dropping, yet prices are rising. Part of this is due to the drop in refining capacity, but what’s your general view of this. Are the big boys engineering the price nowadays a la good ole Enron?
The money that is locked in the closed loop is going to what is perceived to be safe–just like in 2008.
It’s like filling your gas tank. You use your Visa card and off you go. The monthly Visa bill comes and you pay it. Then you have to fill your gas tank again. You use your Visa card to pay for it, and Visa sends you another bill that you have to pay. Closed end loop kind of thing.
“set up” t h e bowling pins,and repeat,obvious. brilliant. cant wait till people start looking for a pound of flesh,when does that get priced in?
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