Self-Fulfilling Prophets Lead to Self-Fulfilling Profits

Seeking Alpha ^ | May 29, 2009 | Paul learton

[arthurus]

The psychic tells him that he will soon be $50 poorer. The psychic then charges the man $50 for the session. The man, being somewhat simple, is so impressed by the psychic’s abilities that he tells his friends.

The friends, also gullible, experience similar sessions with the psychic and are similarly impressed. They in turn tell their friends. Eventually the psychic is world renowned as the Ultimate Guru for forecasting the future. As laughable as this scenario seems, it’s roughly how today’s stock market rally is playing out. And the psychic is the “futures market.”

[arthurus]

Hmm-m-m-m-

[taxcontrol]

I’m believing that the Treasury through TARP is forcing Banks to buy the market futures in an attempt to “stabilize” the markets. As volume continues to decrease, and unemployment continues to increase (thus less money in 401K funds), I believe this is unsustainable.

The second drop, will have the natural tenancy to be fast and hard. Not sure what the zero / fed / treasury will do at that point.

[VegasCowboy]

I’m believing that the Treasury through TARP is forcing Banks to buy the market futures in an attempt to “stabilize” the markets.

Check their balance sheets. If you don't see large investments in equities, then you can assume this isn't the case.

Traditional banks can't buy equities, by the way.

[blam]

The DJIA is down 137 as I type.

[snarks_when_bored]

It’s “the Obama put”: Soros and his cabal of super-rich hedge fund Democrats are doing their darnedest to protect their puppet by propping up the market. Expensive work, but worth it to them, I guess...