Posted on 07/29/2012 8:12:01 PM PDT by OneVike
Since the US economy and investment markets are in better shape than any other major venue, investment cash is propping up asset values. As the old joke goes, to escape being eaten by a charging bear, you do not have to be faster than the bear, just faster than the other guy.
It will tank WHEN George Soros wants it to tank.
plain and simple
Look at the Stock Market adjusted to the price of gold. I think that looks more accurate. This is the democrat controlled stock market... Legislation and regulation picking winners and losers. Totally unrelated to the skyrocketing costs of food and energy, which are not indexed for inflation figures. Lots of free Uncle Sugar money out there too.
The headline on Drudge is that guns may be regulated, and of course the UN treaty in the headlines is making gun owners nervous.
My guess is gun stocks will soar tomorrow. Drudge can have that effect.
About two years ago, I asked someone that very same question.
They told me that the day-to-day market purchases aren’t done by people. They’re done by computer algorithms.
The crash a couple of years ago? Yeah, a computer went haywire and started selling. Other computers saw the trend and started selling. It was a technical glitch.
Yes, humans run the computers, but the majority of the work is done on autopilot.
That is why I quit watching the stock market. It used to be a good reflection of the economy, but it’s not any more. Now, what you’re watching are a series of computer programs reacting to one another.
The human trades can influence the market (cause reactions in the programs) - if there are enough of them done at one time.
Simple concept. All shares outstanding are valued at the last sale, no matter how small the volume in the trade. This makes it easy to manipulate the price. Ever read “Wall Street Insider’ by Richard Nye? An excellent book written back in 1973 or 1974.
Can you cite a source? I haven’t read that anywhere.
It’s called fraud and manipulation.
The volume is at historic lows.
The mega-bankers (and massive supporters of Obammie the Commie) were the prime recipients of TARP and the QEs. That is how our system of money creation works. The Congress and Treasury decide the need more money. They could either directly tax the people for the money or make new money. They don’t tax directly, because they’d be voted out of office. So they make new money. To do so, the Treasury works with the Federal Reserve and says, “We need X billions of dollars.” They pretend to hold a sale of T-bills and other federal instruments, but these never bring in the funds they need. So the Fed says, we’ll lend it to you. The Treasury writes and IOU for the needed amount and the Fed “gives them the money.” This is done electronically and simply appears as assets in the holdings of those banks that are of the Primary Dealer elite. That means that they go to the Fed’s “Discount Window” and get money very cheap. They then turn around an lend it out to the second-tier banks who loan it out to the “street” in the form of mortgages, care loans, business loans, and personal loans. The Primary Dealers make lots of money on the interest.
Normally, when new money gets pushed out through secondary and tertiary lenders, more money/cash hits the street. As this happens, the “velocity of money” picks up. This is how frequently a dollar bill exchanges hands in business activities.
Now, you need to keep in mind that while the M1 money supply has only gone up a bit, the M2 just passed the 10 trillion mark for the first time. This is because the money that the Fed created was largely kept digital and simply exists as digital entries in the banks’ ledgers. Because the velocity of money is so far down, we know that the TARPs and QEs never really hit the streets.
So where is all that money?
It is being used by the mega-bankers (GS, JPM, Citi, etc.) and they are using that money to invest in the markets to recoup their losses from 2008 and forward.
They use High-Frequency Trading software applications to invest in the market. This, to any sentient being, is evidenced by the just-about daily 11:00 and 3:00 spikes in the DJIA and by the massive resistance when there is an attempted sell-off (look at the peaks in valleys on a “down” day) vs. the near-zero resistance when the DJIA booms. Normally, if there had been a couple of down days, when the market spiked again, you’d see lots of huge drops as people sell for the profit.
This secondary method of money creation is an indirect tax. When the new money does finally hit the street (as it must, or be pulled back out of the economy thus causing a deflationary spiral) the result is an inflation in the money supply. When that happens faster than the value of goods and services, the result is a decline in the value of every dollar that is circulating. This is known as “inflation” which means simply an increase in the money supply. When this happens, it takes more of those weaker dollars to purchase the same goods. This is the inflationary impact of the increased money supply.
THIS IS WHY INFLATION IS A HIDDEN TAX. IT STEALS THE PURCHASING POWER OF YOUR DOLLARS AND SPECIFICALLY HARMS MOST THOSE WHO SAVED DOLLARS YESTERDAY ONLY TO FIND THEM WORTH LESS TODAY. It also hurts the poor the most, because they are not privy to the new money when it first hits the streets and carries most of the value of the dollar. By the time the new money gets to the bottom, it is worthless and inflation has taken over.
You must also keep in mind that foreign, especially European investors, are terrified at the financial cliff they all realize they have tumbled over. So, they are investing in our market as a safe haven. They are fools because our economy is nothing more than the baggage train connected to theirs and we are all going over the cliff together.
Now, why would the federal government want to fraudulently manipulate the market? For a couple of very good and dishonest reasons.
1st. they want Obammie the Commie, the spender in chief, to win reelection, so they need a good market to point to say, “He’s the man.”
2nd. the mega-financiers are not capitalists, they are socialists (or, to be more correct in terms of economic theory, fascists). As such, they believe in the DNC version of Keynesian economics, which they mis-translated from the original to read, “The government should take as much money from business and citizens as it can and the government should spend and invest that money as it deems best.” They support this because they are the recipients of all that money, and it makes them rich and powerful, as they can but politicians.
3rd. The wages, benefits, and pensions of the public-sector unions was promised under the ridiculous assumption of 8% growth in the markets EVERY YEAR. If it falls below this, we face Greek-style “austerity” (defined by sentient beings as meaning “spend within your means”). It is already evident that all governments (local and federal) will never be able to pay the wages, benefits, and pensions to the public-sector unions on a forward basis. Hence, many municipalities have already begun declaring bankruptcy to rework their financial obligations to the unions. This is imploding and is only a matter of time.
I believe that eventually the federal government will nationalize private retirement accounts (yes, 401Ks). They will first make the unions “suffer” tremendous “cutbacks.” We may even see some rioting to show how unhappy the unions are. Then the government will say, if we don’t pay the unions and they strike, the country shuts down. So, they’ll take our 401Ks, they’ll continue to pay the unions with them claiming that they are simply adding it to Social Security and that we’ll get it back when we retire.
It will be nothing less than theft. But that’s all the government does to make money anyway, so it’s nothing new.
Corporate “profits” and the cash they supposedly have lying around are a fabrication of the left to paint businesses as greedy and hoarding their money when they should be investing.
When you compare the profits and “hoarded cash” to their liabilities (debts), they vanish.
Some corporations are doing very well. Many businesses are just getting by and don’t have the capacity to expand.
You are correct. There is a new trend where the markets spike going into the 401K dump. The handlers go all-in just before 401K deadline, and they do so for personal profit.
vwinx and or vtenx(or your allocation pref) directly from Van.No fees DCA in and fughgetabout it
ping
The market moves off of psychology as well as economic rationale.
The market anticipates major events by 6 months...the election is in 3.
"So what do I worry about? I worry that investors forget how devastating a deep investment loss can be on a portfolio. I worry that the constant hope for central bank action has given investors a false sense of security that recessions and deep market downturns can be made obsolete. I worry that the depth of the recessions and downturns – when they occur – will be much deeper precisely because of the speculation, moral hazard, and misallocation of resources that monetary authorities have encouraged. I worry that both a global recession and severe market downturn are closer at hand than investors assume, partly despite, and partly because, they have so fully embraced the illusory salvation of monetary intervention."
Any win by Romney will be rather larger than the official numbers show. Vote fraud this time around will be like Chicago or St. Louis all over the country and the APO vote will largely be excluded as it was in the last two elections.
Seems like all things considered there have been days over the last three and a half years where the type of news on a given day would have driven the Fall 2008 stock market down 500 points. That never happens anymore.
Three words: “Plunge Protection Team”
I hope that before you plowed your resources into your land that you converted it to gold or silver.
If, I find that Obama and Bernanke have been investing stimulus to prop up the market
It's no secret that the Bernanke policies have been helping support the market. However, the Fed will withdraw those policies and raise the interest rates if tax/spending policies are altered. Obama has no interest in doing that so Bernanke continues.
However, this is why I emphasize to watch the Romney numbers. The market knows that real reform will take place with Romney and a GOP Congress. This is why investing in something like Ford now (which is low) or Alcoa or Caterpillar could really bring advantages. These are turn-around stocks.
However, it may be wise to ease in to the market and save powder if you need to average down. If Obama pulls a fast one like naming Hillary Clinton for VP the numbers could change though I still think Romney will win. Good luck to you.
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