Is it just a coincidence that the Federal Reserve’s 350% increase in its balance sheet has exactly tracked the 200% increase in the S&P 500 over the last five years? Inquiring minds want to know whether the five years of QE created the stock market rally or whether it is just a coincidence that they coincided. The Fed is supposedly done expanding at the end of this month. Do you think that has anything to do with the volatility in the last couple weeks? Where do we go from here?
Is the stock market like a shark? If it doesn’t keep ingesting QE, does it die?
I’m sure the residential and commercial real estate price increases are market driven and not a function of the Fed balance sheet expansion. Right?
[img
?w=585&h=418[/img]
The only reason the stock market makes gains is because of Fed QS ( Quantitative Sleazing). US and global economic growth is slowing and I believe this is a permanent trend. Total unemployment (U-6) is increasing (now over 25%) but neither the Fed nor government officials will admit this. Nowhere near enough good jobs are being grown in the US to allow most to prosper. The labor participation rate is declining. More corporate mergers, layoffs, bankruptcies, etc, are all signs of increasing economic weakness. This isn’t even counting climate problems affecting agriculture production, Ebola, wars, government corruption, overspending, and of course the Fed itself devaluing our dollar causing inflation the level of which they keep lying about too.
No amount of lies or Fed Sleazing will stop the economic decline of our real economy (not the fake one that runs on Derivatives and HFT) – and neither will enriching a minority at the expense of destroying the middle class.
“We are on an unsustainable financial trajectory, the financial system has been unmasked as unstable and unfair, and that contributes to inequality, part of which comes from the operations of the financial sector, and is a formidable, formidable cause of social instability in the medium term.”
Robert Johnson
What we still refuse to accept is that many of our “new” laws/regulations, are nothing but re-purposed EU laws/regulations.
The same ones that offshored their production (for the environment, safety, kids and whales), and now are on completely unsustainable economic paths.
But somehow I am to believe that it will work differently HERE?
Oh, that’s right, USA! USA! USA!
Schizo Market Has Biggest Plunge In 6 Months Following Most Euphoric Surge Since 2011
Submitted by Tyler Durden on 10/09/2014 16:06 -0400
Yesterday’s panic buying vertical ramp in stocks – decoupling from everything but the trusty partners VIX and AUDJPY – has been entirely unwound as The Dow drops over 300 points (nearly unchanged for 2014), Trannies tumble and Small Caps slump. Stocks all closed significantly lower – despite a late-day effort to lift – ending the day down from pre-FOMC Minutes. Treasuries closed 0-2bps higher in yield but had ignored equity exuberance and provided the reality check by the close. Real trading volatility ranges are surging in the major indices which historically has not been a good sign. The USD retarced some of the FOMC losses as Draghi chatter pushed EUR higher. Oil prices cratered under $85 as gold and silver rose (despite USD strength). Following yesterday’s biggest intrday swing since Nov 2011, the Russell 2000 saw its worst day in 6 months.
Today was the 4th most active (in terms of quotes/trades) ever.
The Fed has a choice: raise interest rates and destroy the phony economy, or keep printing and destroy the dollar. There is no third option.
I think they will keep printing and hope for the best. They really don’t have an alternative. They are riding a tiger and don’t know how to get off. This has all been done before and the story is always the same.
Buy stuff (that has intrinsic value).
Steve Hogan says: The Fed has a choice: raise interest rates and destroy the phony economy, or keep printing and destroy the dollar. There is no third option.
WC will no doubt criticize me for going off topic but, Dr. Pangloss asked the class whether there was an alternative capitalism or communism, no one had any idea, yet here we are 30 years later, living in a socialist land. Steve reminds me of that group, he can’t imagine a situation that is different from the current one. One thing we can always count on is change. Americans went from beads to fur skins to gold, silver and finally fiat.
So what’s with all the hand wringing over the dollar? SGT Sinclair said, don’t worry, Juan, they can’t take away your birthday. If you are heavily invested in dollars, you are going to lose your ass. Listen to OTC, use the scrip to buy stuff until the day comes when they issue new currency or electronic credits. What do you suppose EBT is if not an experimental platform for controlling and monitoring all purchases from every ‘authorized’ buyer?
Democracy is dead, freedom is dead, in a world of dwindling resources, private property will disappear and heretics professing belief in the free markets will be denied the right to buy goods.
El Coyote,
I’m not sure if you’re equating democracy with freedom. They are definitely not the same. In fact, one could argue they are mutually exclusive.
As for private property disappearing, I would agree that the short-term trend is not good in the western world, but it isn’t likely to last. It’s hard to control capital flows.
It’s also becoming apparent that secession is becoming quite the rage. Decentralization will mean that those seeking escape will move to regions that respect private property.
Steve, let go of your fixation on the dollar, it is but a construct sold to you a long time ago as the bedrock of civilization but in fact, it is crumbling like our infrastructure, we have gone to war to reinforce this leaking dyke. When folks finally lose heir faith in the dollar, even that piece of paper will have a fluctuating value attached but it will be measured against the Yuan. In fact, we will have a paper currency that looks like a Yuan bill but we will refer to it as a Chink-dollar to make folks comfortable with the changeover.
The excuse will be that since we printed so many dollars, the Yuan has achieved parity with the dollar and it costs more to print another dollar than it does to adopt the Yuan, so it will be sold to the American people as a cost-cutting measure as we adopt the currency of our economic bosses. Of course, the real cost cutting will come when our labor is priced in Yuan and compared with Chinese wages so that eventually, we will be working for 2 Yuan per hour with cost allowances the first few years while we adjust to the new price structures.
And here you thought it was the end of the world, Steve.
No, I recall Stendal’s description of the Marquis’ plan to establish a democracy in France so that the nobility could retain control of the government by giving the proles a choice of candidates.
The proles always dream of freedom but they don’t know what to do with it. Dr. Ed Leonard said the best definition of freedom he’d heard was Kristofferson’s “freedom is just another word for nothing left to lose” which Stucky echoed when he said he felt free after his ex left him destitute.