It’s all clear to me now. Soon, stock market gains will roughly equal securitized housing market losses. Then the housing securitization market can be retired until the next housing bubble that will start in about 2020, when Chinese and European immigrants come streaming through our international airports.
We all know that the plan at the highest levels of government has been to “get the stock market up” at any and all cost and at the expense of everything but banks. They know that the “well off” can only feel good about themselves and future prospects if their 401k’s are performing adequately. Additionally, short-term corporate confidence, spending and hiring can only be positive on the heels of an appreciating stock price. Who want to hire/spend with a trashed stock?
So the increase in the FED’s balance sheet is $7 trillion or so, roughly equal to the 30% or so markdown for housing losses. And Obama is the Magic President that doubled the stock market in three years. The opposition’s plan to hurt him through high gas prices won’t touch him. The deck is stacked, resistance is futile.
Today Geithner and Bernanke are out talking about how great/shitty things are and that they will need to save the system for a “long time”. ZIRP must be forever and it will be. It is all noise and the seeds of a great/disastrous economy have been sown. We all know that the FED and Treasury are bigger than the markets at this point in history and there is no use fighting it.
Here is some perspective: Investors have withdrawn about $400 billion from equities since 2007. In the three months since Christmas, Apple alone has added more than $200 billion in market value. One stock in three months has made back half of what was lost from all equities in the past four year. So it is easy.
Don’t worry about a thing as markets have proven that nothing can hurt them for the moment. Remember, no fundamental or technical damage can/will be inflicted on markets before April 15, the day that individuals can contribute to their 401k/IRA for 2011 taxes.
Individuals have left the market in droves and mostly only buy stocks or funds with their retirement accounts. And after a six month, 30% run in the SPX, it only makes sense for the odd-lotter to pay up for their equity exposure. After all, those who bought when things looked the worst must sell to those who mistakenly (over & over) buy when things look much, much better, if you believe the propaganda.
So the market will simply “Phone it in” for about another month or so. Enjoy the quarter end markup that is about to commence. Don’t worry about negative divergences or anything else because this year just has to be different (from last year & the year before).
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not so sure that linear connection between money leaving the market and aapl share price is correct. Lol
Example outlined for perspecitve only…
Do you mean 7 Trillion instead of Billion?
lol. fixed
Good post… mostly
“Then the housing securitization market can be retired until the next housing bubble that will start in about 2020, when Chinese and European immigrants come streaming through our international airports.”
Foreigners don’t travel here anymore more than once. They try it and they get treated like garbage at customs…
TSA and customs killed the tourism trade.
I don’t think people are going to be coming in in droves unless something happens in Asia. Asia is becoming more capitalistic while our government is becoming more corrupt.
I don’t really disagree with anything else except I have a slightly different timeframe on housing. I think it’s going to have a short lived but strong rally at some point, and then crash due to high levels of student loan debt and an inability for younger generations to finance it as older generations retire.
First off, let me say you have a beautiful mind sir (no homo).
Secondly, your focus on 4/15 always puzzles me. Isn’t it a “retail” date? Yet, you seem to acknowledge the Fed, corp. buybacks,et. al, are really the material players. What gives? Thanks again for all your awesome perspective.
“Normal” corrections can only occur AFTER the odd-lotter has allocated his capital near the multi-year peak. That is the immutable law of investing. And thank you…
Buy now, sell all @ april 15 then goin to the beach, don’t come back until fall…
Scott, I must admit, I’m beginning to sense some cynicism in your postings…
Prolly just me…
😉
_______
Just buy and you’ll be OK…
whats the history tellin’ about election years?
Most people assume the best performing year is the election year as the government wants to prove it’s running the economy well. But it’s actually not true. Historically the best year is the year before election year (last year), with election year being the second best.
In the grand scheme of things, not much of a sample size though, with some serious deviations. 2008 wasn’t exactly characteristic of the second best year in the presidential cycle, much like last year wasn’t characteristic of the best.
Who are the “highest level of government?” Where do they hang out and what levers do they pull?
lol, excellent, dont forget da robots.
But knowing my luck, the longs I have now, and whatever individual stocks I pick to buy over the next couple of days, will NOT go up, while the rest of the market rips higher and higher into April 15. Then, when the massive correction happens, the turd stock I have will get hit extremely hard along with everything else. (Actually, this procedure already happened last year!)