Market Majic by design

Discussion in 'Financial Cents' started by overbore, Aug 22, 2009.

  1. overbore

    overbore Monkey++

    There’s just something wondrous about a magic show. It starts when you’re showed something ordinary, like an empty hat. And next thing you know, the magician starts pulling rabbits out of it. And that’s only the start. And what are we being shown? Economic recovery on all fronts. And it looks genuine in a lot of ways… and in others, there’s still a suspension of disbelief. But there’s a hidden side to magic—the slight of hand, the smoke, the mirrors, which merely masks the fact that there is no real magic. It’s just an illusion. And there’s no greater illusion than the performance of global equities right now. Just like asking where the rabbits come from, or in this case: where is the money coming from to keep the rise in equities? Not from individuals. Not with rising unemployment, which means more people are cashing out of stocks and retirement plans to meet current bills. Most individuals worthy of the title of investor just don’t see any value—nor reason to invest when markets rise 50% in a mere five months. Not from companies, which are working to clean up their balance sheets—assuming they can even stay in business at all. Not from the banks, who are keeping excess reserves and declining to make loans while existing loans sill remain overvalued on the books. So what’s the real culprit? Well, some are blaming high-velocity trading. But even that culprit—or any other scapegoat that can be thought up— is still part of the smoke-and-mirrors. It’s always about money creation in the banking system. It’s not getting loaned out via banks—it’s out to the casinos on Wall Street. It’s why the market has rallied nearly 50% in the past few months while the dollar has declined nearly 13%. This presents a dual problem for investors: it could all end in an instant, causing stocks to plummet and the world to go back to the fearful events of last fall. On the other hand, the rise in markets could keep going—and markets are always biased on the long side. Just in the same way you can’t actually saw a woman in half and put her back together again, you can’t trash the economy with easy credit and expect that same trick to work in bringing it back together again. And while this magic show is going on, more and more plans are devised and implemented to pick our pockets. They spend, we pay. Nice scam if you are a spendocrat/ progressive. marxist or one of their enablers. My personal solution. project where the dollar is headed ( hint DOWN, DOWN, DOWN ) and act accordingly. Laus Deo overbore
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