The Federal Reserve put is well entrenched. Their mandates used to be to hold inflation in check and to promote high employment. They are still interested in promoting high employment, but they want now to CAUSE inflation, and the number one priority in the last decade and counting is to see to it that the stock market keeps going higher and never fails. They are the true custodians of the stock market. Since they have an unlimited balance sheet, they think they are in control of things. We shall see. The skeptics think instead they are just making a dangerous bubble bigger and bigger.
Category: Stock market and investing
Tulips and Bitcoins
One wonders whether this mania with Bitcoins is exactly like the Dutch tulip bubble of the 1600s?
Growl
The bear market wakes up from hibernation.
Bear Market?
Stock market seems stalled near the all-time highs. PE ratios are through the roof. Despite the Fed-fueled market, we have, in fact, a very deplorable economy, with high unemployment.
Beginning to feel like it is a bear market. You get sharp, fear-ridden drops, and very sharp, bear-market rallies that end up fading. Feels like that is about to happen. Look for these 1.5%+ rallies that end up fading after sharp drops. If that starts to occur, would not be surprised to then see a big 5% down day soon. That would really unnerve the market. That would mean the bear market has begun with a vengeance.
Everyone is thinking the Fed will save us. What if that is wrong? One thing you don’t want to do is buy the dip in a true bear market — what everyone has been doing now for 10 years.
The new mantra could be sell the rally — as in get out — and then go short. But watch for these sharp drops, followed by explosive rallies. Yesterday was kind of like that. The S&P actually went down sharply to 3805 and then rallied back to a decent gain before ending the day fading into a small positive uptick.
When the bear does start, all the buy-the-dip traders are going to be fooled.
Crash
Stock market inching toward the precipice and the inevitable crash from these incredible lofty heights. It is becoming more and more dangerous, not less. Don’t try to squeeze out those last few pennies — they will cost you dearly.
Stock Market
Now is the time to seriously reduce your exposure to the stock market. But when the music stops, it will be very difficult and expensive to do so. Don’t be a FOMO idiot.
When the Music Stops
When the music stops in this jet-fueled (thx Federal Reserve) market, don’t be caught without a chair to sit on, cause it’s going to be a rocky road down to the bottom — all sellers and no buyers.
Money Printing
The Federal Reserve money printing is causing assets like the stock market to behave as if we were in a very healthy and even robust economy, which of course we are not. Don’t make the mistake and think that we are.
Gap Closing?
When will the gap between the real economy, which is in shambles, and the over–priced, sky-high stock market close? And will it close with a vengeance?
Are you going to be caught without a chair to sit in when the music stops?
Bail Out
The Treasury and the Federal Reserve are bailing out virtually everyone, but who is going to bail them out?
The Treasury does this by taking on more government debt; while the Federal Reserve does this my magically creating money from simply expanding their balance sheet. In both cases, in other words, the money used to bail everyone out is created out of thin air. When this charade ends and this house of cards collapses, who is going to come to the rescue?
