"I told you he'd understand."
Posted on 02/21/2012 9:20:09 AM PST by Para-Ord.45
Wondering why the DJIA just passed 13K again?
Wonder no more: as the chart below shows it is entirely due to the nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years.
As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that. We would add that with the entire centrally planned ponzi scheme hell bent on preserving the illusion of nominal gains, global liquidity is now fungibly sloshing from one market to another with absolutely zero resistance whatsoever. At this rate, it should double again in 3 years, then 2, and so on. Will the Dow hit 52K in 5 years in that case? Why most certainly. Just ask any remaining citizens of the Weimar Republic. They know all too well about exponential stock market rises. They also know absolutely everything about the self-delusion that comes with chasing NOMINAL numbers. Oh, and before we forget, expressed in spot gold price, the central bank aggregate tally has moved from being the equivalent of 10 billion oz of gold, to just 8 billion. Guess what is 20% underpriced.
(Excerpt) Read more at zerohedge.com ...
Does anyone notice that even though the DOW is going up, the volume is low? If things were genuinely robust, shouldn’t volume be hi as the market rose?
I was watching some panel on Fox Business last week and one of the talking heads pointed out that the general public is not in the stock market. These are basically the speculators that are running things now. So, perhaps that is why the “volume” is so low.
Another reminder to up our prepping.
One interesting (and to me somewhat scary) phenomenon is that very little of the trading now is done by actual humans; something like 90% of the trades are done by computers running highly specialized software algorithms.
The DOW reflects inflation. Go figure.
I tried to explain that to an elderly gentleman about 5 months ago. He totally went off on me telling me I didn’t know what I was talking about. I then explained 1987 and afterwards. He understood none of it.
“volume” doesn’t care if you’re an individual, a mutual fund, a spectator, or a turnip.
I have to wonder if the institutional investors in the form of the Mutual funds aren’t heavily weighted in cash and aren’t buying/selling. Volume obviously is a function of trading, not owning. And yes there’s billions on the sidelines in Treasurys.
So maybe......this is a good thing. When volume explodes to the upside a bubble will begin to be created and volume will be the indicator to watch to help us all get out before another crash!
I got another Q. Why are the stock market companies doing so great and local companies are disappearing from the malls?
average share holding time is 28 SECONDS!
The high tax/regulatory environment benefits large companies over small because they can do work-arounds the smalls can't. I'm staying in the large caps until the Dems are out of power, and I may not return to smalls even then.
Financial institutions can survive off near zero loans from the Fed and other financial instruments. Also, they are a world wide category, ie rich folk in Russia, Brazil use them.
And local companies as you stated are dependent on the local economy as a whole. Really tough for them especially in Nevada and other high unemployment situations except if your in the foreclosure dude or a repo man.
I think the rise in the market is partly explained by no matter how bad it is in the US it not as bad as everywhere else.
Well, I am investing my money. That is probably it. LOL. Keep your damn gold. If there is a dumping of the dollar I want land, food and water. Gold will be worth no more than cow poop. Good try, but I am not going to keep the gold bubble going. I saw what happened in the eighties.
anyone who is a Democrat refuses to see anything but “keep government out of social security” (don’t even bother explaining it to them) These are the same idiots who think FDR was not a socialist and that Obama is not a communist.
I would not even trust this blog. (too simplistic an observation and other factors involved too)
It is like the old time “intelectuals” who pretend they smarter than everyone who push for a return to glass/stegal without consideration as to why it was bad law in the first place.
they are like bookies- no matter if the stocks go up or the stocks go down, they make money
"I told you he'd understand."
I don’t trust 99% of the garbage posted here about the markets. It’s all bovine scat. I’m still waiting for all the crashing and burning that was supposed to happen by now. In the meantime I am far better now than after the big crash. I made it all up and then some, and have more shares to boot.
Now excuse me while I flail around like a moron and jump out of a window.
The computer trading was mentioned on FOX Business this morning. When the stock market makes 13,000, the computers boost it into a rally.
Low volume - computers and speculators...seems to me like the computers are ‘trimming’ the amateur speculators that think they can make money with a computer program they bought for 199.95 (reduced to three easy payments of 19.95) at three AM in the morning off TV....
I tend to agree. It seems to me that all the artificially-created money being pumped into the world economy as "stimulus" is actually ending up in the stock market bubble.
The DOW and fuel are up which means that the economy is massively improving beyond our wildest expectations!/s
Not sure you can compre the gold event of the early 80s to now - the former was an inflation hedge whereas today it’s behaving more like a risk asset and there is a good amount of demand for the metal in both private and sovereign circles (the Chinese on the latter).
If Israel moves on Iran without US assistance, a large spike in crude will see stocks and precious metals fall.
I like gold, don’t get me wrong. Just hard to get into it here when Greece is still on the bubble and the ME is a tinder box.
Day traders and individuals are largely gone from the market, so you now have mostly large things, mutual funds, hedge etc driving things. And they don’t do high volume they aren’t going to generally buy a stock at 5.20 and sell at at 5.45 later that same day
Volume is just how many share change hands... its huge when you have massive speculating and churning going on.
Larger funds are more buy and hold types, they aren’t trading for trading sake but making trades based on portfolio needs and definitions and are usually holding them until situations change and dictate a change, not simply chasing something else that returns better for its own sake.
I read recently that 70% of trades are done by computer. While Wikipedia is not my favorite choice of confirmation, what they have in this case is generally true. This is why the average holding time is so low. This can involve millions of shares of a stock bought and sold within seconds.
http://en.wikipedia.org/wiki/Algorithmic_trading
that's good advice.
Good try, but I am not going to keep the gold bubble going. I saw what happened in the eighties.
Gold is just following a curve that is highly reflective of dollar inflation. It isn't a gold bubble at work here, it's a fiat currency bubble and it's collapsing.
LOL! Yep...
Try explaining that to all the stock holders of Washington Mutual who watched the FDIC STEAL a fully solvent bank to prop up an ailing JPM. And all the vulture hedge-funds who jumped in to finish it off.
F Wall Street. F the markets. Corruption rules, and if you can’t see that, you just haven’t been bit yet.
Good luck...
I was surprised that as the economy was collapsing, the markets were rising. Then it hit me about a year ago: The markets are just reflecting the inflation of the dollar - the dollars being pumped into the system even as many prices collapse due to low demand. But the inflation will win in the end.
And it was then that I told my wife, never mind about moving it. Leave all your 401k in the market. So far I’m really glad I did...
Because investors are not looking at the whole financial picture for large corporations. There are two ways to show increased profits: 1.) have a growing business that is attracting more and more customers; or 2.) cut expenses like a fiend; layoff the workforce; cut R & D. The second way, of course, shows a temporary profit - if you don't spend on R&D then 5 years down the road, you don't have new products to sell. But the modern executive is not going to be around that long - he wants to show increased (all be it, unsustainable) profits TODAY, so he can get his bonus and stock options and move on to the next company. But Wall Street puts those phony profits into their spreadsheets and - WOW! - with these growing profits the stock is a BUY. That's what happens when computers are picking stocks rather than knowledgeable analysts.
The small guy really only has option 1 to increase profits - he doesn't let his staff get bloated in the first place, so there is little, if any, deadwood to cut. Paper profits do him no good if he can't make payroll next week. And many are probably closing because they know that come Jan 2014 they can't survive the costs of Obamacare, so there is no incentive to "hang in there" and wait for the economy to turn. If that lease comes due, it's time to pull the plug.
What will happen if investors continue to sell U.S. Treasury bills and buy oil, gold, and stocks, as they’ve been doing yesterday and today?
First, the U.S. bond-market bubble will collapse, causing interest rates to skyrocket and Wall Street banks to need immediate trillion-dollar bailouts. Then rising oil prices will create $5-plus-a-gallon gasoline, causing anger and mayhem at the gas pumps.
Why does Mr. Ahmadinejad want to drop a nuclear bomb on us when we’re doing such a good job of destroying ourselves without outside help?
I’m moderately aggressive and have been for a long time. Been doing rather well. Like I said earlier, I gained back everything I lost in the crash, made plenty more, and have more fund shares.
I feel really sorry for all the people who lost and then got out. NOT!!!
You don’t lose money until you sell.
>> Keep your damn gold. If there is a dumping of the dollar I want land, food and water.
Yeah, my attitude exactly. Oh, and the farm toys to work the land too.
BTW, congrats on your n00b vanity thread! 280 posts; not too shabby! :-)
Thanks I was hoping for 100, but 280. Even I am flattered. I am smart enough not to push my luck for a while. And yes, farm toys are the best. Like to know what the preppers intend to do with the gold. Boat anchors I guess.
It’s all pretend, except for the inflation at the gas pump, the grocery stores and the real world we live in. The money that is causing us to spend more to survive has been borrowed from us, and we don’t even have it yet.
No argument from me; what you say appears to be largely correct, but............
Have you asked yourself why the Day Traders are outa the market? What with all the new platforms and stuff like online trading for near no commission it would seem to be a Day Traders delight.
I personally find that rather odd!
The markets hit 13,000 — all hail the king!!!!!
—You don’t lose money until you sell.—
Precisely.
That said, some have the “guts” to ride it out all the way to the bottom...
Simple...
Most of them lost their shirts back during the crash. So they are going to be gun shy, majorly gun shy for a long time yet.
But don’t worry sooner or later the exuberant excess will return, the hard lesson learned forgotten and everyone you talk to will be day trading again.
“. Like I said earlier, I gained back everything I lost in the crash “
This only depends on what VALUES exist at the time of “cashing out time (sold),” relative the time purchase (bought) price.
Food/essentials/oil/gasoline/transportation...new auto prices, are much steeper and climbing, even during the time of unemployment uncertainty.
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