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View Diary: The Stock Market is Not Crazy and the Republicans are Toast (210 comments)

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  •  uhm (10+ / 0-)

    Look at the facts:
    1. Volume sucks. There is no support for this rally
    2. For earnings you have to remove the banks, which have easily manipulatable earnings ... and you have to adjust for all the one time charges crap.
    3. When the fed buys it pays with money that then can go elsewhere ... like into the market ... because it has already bought up a lot of the alternatives (like all the long dated debt)
    4. Stock prices don't reflect anything except the insanity of algorithms. All you have to do is spend a day or two watching how stocks trade and you will realize all the bs they teach in bus school is just bs. Just look at the volatility in apple for but one simple (but big) example in volatility. One day worth X, a few weeks later worth only 1/2 X. How the heck is that rational?
    5. The economy is now in neutral. China and Japan are rolling over and Europe is a mess too. Only massive fed intervention is keeping the US afloat. The Fed is printing $80 billion a month ... and the economy creates 150,000 new jobs ... so about  $500,000 per job. That sure looks sustainable ... or symptomatic of a broken economy.

    There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

    by taonow on Tue Apr 30, 2013 at 05:04:46 PM PDT

    [ Parent ]

    •  There is no "cost" to the Fed's programs. (7+ / 0-)

      In fact the Fed's earnings go straight to the taxpayer.

      You think Fed intervention is a bad thing like the Ron Paul crowd wrongly says.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Tue Apr 30, 2013 at 06:13:04 PM PDT

      [ Parent ]

      •  it is when it cant be unwound (5+ / 0-)
        Recommended by:
        taonow, Jim P, JesseCW, banjolele, ozsea1

        how do you unwind a 4 trillion dollar position?

        •  That is the big unknown. (3+ / 0-)
          Recommended by:
          Satya1, Dr Swig Mcjigger, Aquarius40

          My personal theory is that the GSE's will be making so much money down the road they will retire their debt as fast as they can.  Fannie Mae just posted record earnings in a housing slump.

          That is complete speculation though.

          "The way to see by faith is to shut the eye of reason." - Thomas Paine

          by shrike on Tue Apr 30, 2013 at 06:31:15 PM PDT

          [ Parent ]

      •  Huge costs (6+ / 0-)

        There are massive costs to the Fed programs ... among them...
        a) artificially low rates which hurt savers and eventually pensions and pension funds. The fed is trying to force investors to take on more risk (is that really such a bright idea?)
        b) misallocations of capital. Interest rates are the key element in a capitalistic market. They help decide where capital gets allocated. If you manipulate this market signal you will get misallocation ... which eventually will come back to bite.
        c) they are and will create inflation. For the moment that inflation is p[primarily overseas but it will slowly filter stateside ... and by then it will be too late to cool easily. (Just ask anyone doing business in China about the inflation in wage rates)

        There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

        by taonow on Tue Apr 30, 2013 at 07:42:33 PM PDT

        [ Parent ]

      •  Except for Interest Rate Suppression (6+ / 0-)

        And retirees trying to live off fixed income investments.

        With respect to interest rates, imagine having a target return rate of 8.0% as a municipal pension fund manager.

        And the fed funds rate is at 0.125% and the 10-year is at 1.67%.

        Yet, you're expected to return 8.0% for the foreseeable future.

        Do you go to your mayor/governor and tell him/her that city/state workers are going to have to settle for less than they were promised.

        Or do you increase your allocation to leveraged buyout funds (not so much venture capital), hoping that some of your bets pay off, but knowing that it may blow up your face.

        So far, most, if not all, state pension managers have increased allocation to the Bains of the world.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

        by PatriciaVa on Tue Apr 30, 2013 at 08:13:47 PM PDT

        [ Parent ]

        •  The honest thing to do is tell the mayor/gov the (0+ / 0-)

          target rate is not realistic and some combination of lower benefits or higher fund contributions are required.

          Also disclose how underfunded the pension is at he current time.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Tue Apr 30, 2013 at 11:44:20 PM PDT

          [ Parent ]

      •  tell those little old ladies living (1+ / 0-)
        Recommended by:
        northsylvania

        on bond income, that this is a good thing.

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