Posted on 23rd August 2012 by Administrator in Economy |Politics |Social Issues
If investors haven’t put net new cash into stocks since early 2011, how has the stock market stayed at it’s current level? Inquiring minds want to know. It couldn’t possibly be the Wall Street banks with their supercomputers and free money from Uncle Ben. Right?
Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.
— Ron Paul
Persnickety says:
Can anyone advise on whether the total number of shares outstanding for various companies has changed in this time period? And what proportion of shares are being held by specialist firms / market-makers?
Obviously in a working market, greater supply than demand would lower prices. Since we know the market is massively rigged, is it possible that there have been net sales out of investor hands, without prices following suit?
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23rd August 2012 at 4:52 pm
AWD says:
Yea, and even the big boys are pulling out of stocks and amassing vast quantities of gold now. That means only one thing, the end is near.
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23rd August 2012 at 7:51 pm
SSS says:
Who’s buying? I’m buying!!!!
Specifically, a brand new pair of Skechers sneakers, just a few days ago at Kohl’s. Smokin’ bargain at 30% off. Wore them to the grocery store today and got propositioned 3 times by cougars in just the produce department alone. One of them whispered in my ear, “You can park those puppies under my bed anytime, sweetcakes. I’ve tried the New Balance crowd. Bunch of limp dicks. Literally.”
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23rd August 2012 at 8:06 pm
SSS says:
Damn it. Friggin Alzheimer’s strikes again. Forgot to post the picture that will improve the sex life of every male who visits TBP.
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23rd August 2012 at 8:08 pm
AWD says:
“You can park those puppies under my bed anytime, sweetcakes”
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23rd August 2012 at 8:59 pm
Administrator says:
Posted 2012-08-24 12:19
by Karl Denninger
Pavlov’s Dogs In The Stock Market
Today’s rally can be “blamed” on the letter “released” (in a timely fashion) by Bernanke to Mr. Issa, and which was “conveniently” leaked to the WSJ.
I warned last night in my video (available to gold donors on my forum) that on short time-frames were were quite oversold and as such expecting a further big sell-down after the last two days’ losses was a dangerous game to be playing. The Fed has a long and storied history of waiting for such conditions to release information that says nothing but sends bears running for the door, spiking markets.
That such a gambit was inbound and was almost-certainly leaked to certain special insiders was also rather clear from other patterns. Specifically, the sell-off had a well-below normal TRIN the last couple of days for market conditions and in addition there’s simply no big “fear position” in the VIX, in the internals, or for that matter in the A/D line. This morning on the little dump early on I bought it — I can play the Pavlov game too, but I’m not crazy enough to do anything other than make short-term plays on that predicate in such a so-called “market.”
Of course all of this movement and response might be nothing more than the Pavlovian response — any time there’s a dip one should accumulate into it, because Bernanke will come save the day.
Maybe.
Given our utter refusal to enforce anything approaching “the law” when it comes to big banks, however, my assumption is that I’m being traded against by people with inside information who will never be prosecuted for doing so.
This sort of casino mentality is nothing new. What’s ugly, however, is that this is all the market is trading on nowdays.
There’s been no material improvement in employment.
There is no grand new paradigm shift in the economy taking place that grossly boosts productivity.
There is no innovative new product or service that will drive broad-based gains in people’s standard of living.
There has been no material drawdown in total systemic debt, and federal deficits haven’t come in materially at all.
There are only two ways for equity (and other asset) prices to advance — either the common weal advances materially or there is more debt-based leverage added to the system.
One is good, the other disastrous as while the former is sustainable the latter never is.
And unfortunately the latter is all there is.
It’s been a good ride and I’m making some nice money on long-side turnaround stories, including Sprint and Nokia. But those are beaten-into-the-dirt, still-have-a-business despite being written-off-for-dead companies.
When I look at the so-called “leaders” such as Amazon and Apple, what I see is a business model that either produces ridiculous P/Es and thin margins or worse, a fad-based business model predicated on margins that are sustainable only as long as people can keep refinancing their house and pulling out equity to blow on toys.
That set of predicates went kaboom four years ago.
Bernanke’s hall of mirrors appears to be singularly focused on keeping the last mirage of “prosperity” — the equity markets — pumped up and “alive.”
He will fail because the longer this continues the less bang he gets for each of his QE’d bucks.
We’re in trouble folks, despite the S&P poking around 1,400.
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23rd August 2012 at 12:37 pm
Administrator says:
Looking for a funny picture to respond to that cur SSS and I stumbled on this, even though it has nothing to do with anything.
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23rd August 2012 at 12:40 pm
Administrator says:
SSS
You should see the propositions I get when I wear my Skippy 850s to the grocery store.
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23rd August 2012 at 12:42 pm
Didius Julianus says:
I must be fashion challenged, those Skeechers look similar to the New Balance I wear. Must be the brand is everything thing. Of course, if branding can do what SSS states…
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23rd August 2012 at 5:43 am