Posted on 03/05/2013 4:21:41 AM PST by MeneMeneTekelUpharsin
Charles Brady, senior editor of the FOX Business Network, has put together a remarkable chart that clearly shows the Federal Reserve’s monetary easing policies are not going into the U.S. economy, but instead into the stock market. The chart here compares the Dow Jones Industrial Average with the St. Louis Federal Reserve Bank’s adjusted monetary base. It shows the effect of Fed purchases of mortgage-backed and Treasury securities from Fed dealers, whereby the Federal Reserve buys $85 billion total every month from the big banks, hastening the growth in the Fed’s balance sheet to more than $3 trillion.
The central bank has been creating bank reserves out of thin air since September 2008, making it an official enabler to the federal government’s massive fiscal expenditures that now has the federal deficit at more than $16 trillion, with about $6 trillion added since the president took office, more than any other U.S. president combined.
(Excerpt) Read more at foxbusiness.com ...
And when the Fed pulls back Boom!
Just like in 2007 to 2009.
Is it me, or does the money base roughly match federal spending according to the posted graph?
So...........what should we do?
This is no surprise, I’ve been pointing out that the tiny intrest rates that the banks get from the fed can be used to buy GASOLINE FUTURES and make 5 to 10% day in and day out, not much risk and plenty of reward with OPM....but nobody in repbulicans says anything about it.
-——The market is powered ahead by a growing strength in corporate profits,too———
The piece describes a correlation but buries the reason for market growth. Profits. The line above is a throw away but is the meat of the piece
Companies have ended the quest for growth and have plateaued at a profitable level of operations. The profits are piling up as cash. The profits have gradually increased price to earnings ratios which make the stocks more valuable and desirable. Based on historic P/E’s stocks are reasonable and even cheap.
Stocks aren’t that cheap. The SP500 PE is nearly 18 times, that isn’t cheap. Companies are doing OK profit wise, but it’s only through share buybacks and layoffs. Topline revenue growth looks horrible. You can’t keep growing profits this way without the revenues.
So far only about 4.9% of the companies that have released guidance have raised their estimates, which is awful. This market is unbelievably overextended given the shape of the consumer. Technicals show this market way overbought.
This is out and out manipulation, and when the fall does come it’s going to get very nasty.
They haven't quite gotten their minds around the difference between free markets and National Socialism.
Just watch the percentages vs the precious metals percentages.
Yesterday, the dow was up .27%, gold was up .62%, and silver up 1.34%.
So, the DOW actually lost commodity value yesterday, even though it was “up”.
A bumper sticker:
“Socialism is for assholes”
PING
“The last time we looked at the “hazardous” days for shorting in January and February, we found something very simple - being a bear on POMO days, or those days in which Ben Bernanke makes it his life’s mission to personally annihilate anyone who dares to face his money-spewing helicopter-printer with something as pathetic as a sense of reality and a frontal lobe, leads to certain immediate or eventual destruction, depending on one’s margin level.
“So thanks to the most recent monthly update of POMO days covering the month of March, here is Ben Bernanke at his most helpful, providing the schedule in which he, the NY Fed, and the Primary Dealers will proceed to rip the heads off those who happen to be short in the face of what are the now daily GETCO stop hunts that send the S&P higher by 5-15 point in minutes on, well, absolutely no news, except for the usual deluge of between $1 and $5 billion in additional purchasing handed over by Chairman Ben to the banks because, you see, they need the money.”
Ok let’s see here...ah every day of the month except the 8th, 20th, and 29th. Welcome to the free market.
The current schedule is always here http://www.newyorkfed.org/markets/tot_operation_schedule.html
The problem with moving to a foreign country is that when the collapse comes it will effect the entire world and American ex-pats will be the first ones killed.
the idea of free markets ended when Newt and Denny decided to get millions from lobbiests to support the RNCC.
I’m sorry, but this is an easy charting trick anyone can do.
1. Take ANY two charts that trend linearly upward over time.
2. Create separate Y axis scales for each chart.
3. Align Y axis “A” such that the start point and end point of the chart using “A” start and begin close enough to the places on Y axis “B”
4. Claim causation.
It’s a trick and proves nothing. I could overlay a “World Population” against either of these charts and create a visually similar comparison if I aligned the Y axises correctly.
In this case, the graphs don’t even correlate that well. There are statistically significant moves in the Monetary Base that aren’t reflected in the DOW at all.
NOTE: I’m NOT saying that the Monetary Base does NOT affect the DOW. To some extent, *it does*. Increased money supply causes general inflation, thus inflating the prices of almost all things - including stock prices. The premise that the increased money supply has *been intended* to pump the market, though, is not proven by this chart. Not by a long shot.
1. Real estate - not for me. The minute you buy something, an imploding economy will make it unsaleable.
2. Securities - ROFL.
3. Gold - The minute you buy it, it will deflate.
4. Rental - Government regulation, an eroding economy and moral decay (non payers due to lack of moral training, that "Yes, Virginia, you do have to pay the rent.) mean you won't make any money.
5. Guns and ammo. Too late.
6. CDs in the bank. Really? With what return? You only put money in the bank so the bankers can loan it out for exhorbitant fees and a bit of interest so THEY can make a profit. You get a negative return with inflation.
7. Start a business? Government regulation is making that nearly impossible. Then, if you make money, taxation is going to take at least a third of it. Lawyers may get another 30%. Why bother?
If you’re that far gone; if you’re so sure that any investment you try will be destroyed or fail -
you might as well just buy a 10 acre farm somewhere where there are little to no property taxes,
and grow your own food.
I think I might try bank Robbery.
Yeah, been thinking about that too...
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