Investment & Finance Thread Market Bounce Re-cap

Weekly investment & finance thread ^ | Oct. 19, 2014 | Freeper Investors

[VideoDoctor]

When was there a time that the Fed did not print money?

The AMOUNT of dollars they continue to fuse into the market is what has already, and is continuing to create inflation in the economy.

They have for two years now printed money that has been used to BUY 80 to 90 BILLION dollars worth of bonds and T-Bills a MONTH. They now have incurred a 4.5 TRILLION dollar deficit balance sheet doing this.

To put it simply: They have pumped this money into the stock market by buying these enormous amounts monthly and that is what has kept the market propped up.

This article from the Heritage Foundation from the Spring of this year pretty much shows the FED has painted themselves into a corner and has really NO choice other than to keep printing INFLATIONARY dollars to keep the "house of cards" standing.

Quantitative Easing, The Fed’s Balance Sheet, and Central Bank Insolvency

http://www.heritage.org/research/reports/2014/08/quantitative-easing-the-feds-balance-sheet-and-central-bank-insolvency

[expat_panama]

--and a happy Monday morning to all!   While futures traders may be seeing most commodiites falling (grains are down a percent) they got metals up a tenth and stock indexes are up two tenths of a percent.  Can't wait for the day to begin --no major econ reports today, I mean, what could possibly go wrong now? 

• Reuters World stocks advance on strong data, earnings Global stocks climbed on Monday, with strong U.S. MSCI's broadest index of Asia-Pacific shares outside Japan surged 1.2 percent overnight as an upbeat survey of U.S. "Calm returns after last week's roller-coaster ride," Saxo Bank trader Andrea Tueni said. Japan's $1.2 trillion Government Pension Investment
• Could Another Sell-Off Be Lurking This Week? Last week's tumultuous week in the stock market sets the stage for yet more nervousness and hand-wringing as a fresh set of earnings and economic data are due to be released. Money
• Why health insurance companies are doomed Massive political contributions notwithstanding, competition among health systems and pressure to reduce costs will put an end to health insurers as we know them. Fortune
• China's Banks Are Getting Ready For A Debt Implosion Chinese banks are seeing the writing on the... Business Insider
• Markets Point To a Fed Unequal To Its Task - Reuven Brenner, Asia Times

[expat_panama]

From the 'we-are-not-alone' department:

[abb]

http://www.businesswire.com/news/home/20141020005535/en/IBM-Reports-2014-Third-Quarter-Results

IBM Reports 2014 Third-Quarter Results

Diluted EPS from continuing operations:
GAAP: $3.46, down 8 percent;
Operating (non-GAAP): $3.68, down 10 percent;
Net income from continuing operations:
GAAP: $3.5 billion, down 17 percent;
Operating (non-GAAP): $3.7 billion, down 18 percent;

Consolidated results, including net loss on discontinued operations of $3.4 billion:
Net income: $18 million
EPS: $0.02
Gross profit margin from continuing operations:
GAAP: 48.6 percent, down 40 basis points;
Operating (non-GAAP): 49.2 percent, down 90 basis points;
Revenue from continuing operations: $22.4 billion:
Down 4 percent; down 2 percent adjusting for divested customer care outsourcing business and currency;

[Drago]

Monday’s futures were all green until about 7am EDT...now taking a big drop.

[Wyatt's Torch]

Spot the moment IBM announced a clunker quarter and lowered guidance?

[expat_panama]

the FED said they will continue to print money...   ...to keep the “rigged show” going.

When was there a time the fed did not print money?

Before 1913?

Exactly!  It does not make sense to think money printing that began over a hundred years ago suddenly caused the "rigged show" to begin a rally last Wednesday.

...pumped this money into the stock market by buying these enormous amounts monthly...   ...http://www.heritage.org/research/reports/2014/08/quantitative-easing-the-feds-balance-sheet-and-central-bank-insolvency

The Heritage people did a great job of listing Fed's purchases of T-bills, mortgages, and bonds, no common stocks were purchased.   Here's how the stock prices moved along w/ QE:

The idea that QE is 'rigging' stocks is just not there.  In fact, it would be easier to argue that QE hurt stocks.

[expat_panama]

Huh. Metals are soaring and stocks are down a third of a %. What did you do?

[Drago]

All because of an IBM miss?!? Seems a bit melodramatic.

[Wyatt's Torch]

MS commodities forecast:

[abb]

IBM is a Dow component. Any significant movement in it will necessarily influence the DJIA more than other stocks.

[dennisw]

have a good and productive Monday!!!

Fracking is boosting the USD and US economy for the time being. But more important has been the Federal Reserve flooding the system with phony money since 2008. They have successfully pulled this off so far even with rising prices

This FR money torrent has driven the stock market and goosed housing in many areas. Phoney Obama/phony money/ but so far the hypnotizable sheeple are accepting both and chewing their cud peacefully. Only a black swan event will jolt them out of this hypnotic state, due to half of modern economics is the psychological state of consumer happiness and confidence due to our economy being a consumer driven one.

[abb]

Note how the Dow is down, but the S&P and NASDAQ are up, at least for now.

[expat_panama]

yeah, the dust is settling. Let’s see what stirs things up next...

[Wyatt's Torch]

DJIA driven by the decline in IBM

[Lurkina.n.Learnin]

Apple reports this afternoon.
http://www.nasdaq.com/earnings/report/aapl

As a side note I’ve preferred android but this Apple pay thing has me rethinking. If I understand it right when you use it it doesn’t give your credit card number it leaves a token similar to a purchase order. I like that. Seems like when you use your CC everyone feels compelled to put all your info in their database forever exposing you to them getting hacked at some point in the future. That’s why I don’t buy a lot of stuff online.

[expat_panama]

hmmm. That really does sound like the way things are going to have to be...

[VideoDoctor]

The idea that QE is 'rigging' stocks is just not there. In fact, it would be easier to argue that QE hurt stocks

I believe what's being said is that pouring BILLIONS monthly in BONDS and T-Bills being bought by the FED is not necessarily "rigging" the market as much as it is keeping the "house of cards" standing and in business..

Take a look at the actual number of investors that have left the market as witnessed by the volume of trading.

Over a TRILLION dollars of personal worth has been lost in just the stock market in the last two weeks alone.

[Wyatt's Torch]

Exactly. Furthermore the details are stored on the phone and never hit the Apple servers or the merchants servers. I think it required touch id as well to use. Apple has agreements with the banks to process as “card present” which is lower fees than “card not present.” It’s pretty innovative and potentially disruptive.

[expat_panama]

a TRILLION dollars of personal worth has been lost in just the stock market in the last two weeks

Going by the indexes it's looking more like $0.54T over the past two weeks, but a $T is still close enough and bad enough.  That's according to the market price of publically listed corporations, and while this line of thinking makes sense it also means that the 10% drop in the price of gold over the past year means that 18,000 tonnes of gold were destroyed.  Some people would disagree.

the FED is...   ...keeping the "house of cards" standing and in business.

If that's true then let's decide what we want and what we don't want.  One thing we don't want is the Fed knocking everything down.  We can blame the Fed for there being a house of cards in the first place but I'd prefer to blame the 51% of American voters that messed everything up. 

Frankly, I honestly don't think American wealth creation is a house of cards in the first place.  Americans are strong, powerful, and smart and historically, those who underestimated American power ended up losing big time.