Thursday, July 11, 2013

Dovish Bernanke Speaks, Market Goes Full Retard, to Record Highs

Free market and Austrian economists beware!

There is a dangerous monster afoot, who by merely speaking a few words can alter global markets to whatever whim he so desires.

On Wednesday, shortly after the market closed, this monster, this unsightly beast, one Benjamin Shalom (we kid you not) Bernanke, Chairman of the United States Federal Reserve Bank (an international cartel), spoke in Cambridge, Massachusetts, and intoned, in part, that the 7.6% unemployment rate "overstated" the health of the labor market.

Translated into Fed-speak - which is all that matters to equity markets these days - what he meant was that there was no need for investors to panic. The Federal reserve has every intention of keeping monetary policy incredibly loose, so that even if the Fed dials back its $85 billion-a-month bond purchasing program a little, they do not believe that the US or global economy is strong enough to survive without stimulative measures.

The result was a strong gap-up at the open on Thursday and an all-day party for Wall Street bulls with the S%P 500 and the Dow Industrials closing at all-time highs. Bears were once again crushed and the rookie Dow Theorists who surmised that the dip from a few weeks ago was a sure-fire reversal into a bear market (we here at MD did not confirm any such theoretical reversal, though indications were close) were once again proven not only wrong but absolutely clueless when it comes to Dow Theory.

Markets have now been completely voided of any validity to fundamental valuation. All that remains is intonations from the beast of the Fed and his minions, sending markets any which way they choose. These are markets distorted completely out of focus from reality, in 1984-esque fashion, where bad news (Bernanke is correct, 7.6% unemployment is, in itself, a gross distortion of reality - stripping out part-time, temporary and distressed and discouraged workers, unemployment is closer to 20%) is good because the Fed will continue to supply unlimited liquidity.

In the end, be it five days, five weeks, five months, five years or longer, the stimulus will save nothing. Sovereign economies will end in shambles (some, like Greece, Portugal, Cyprus and Ireland already are), but for now, all anybody with as much as half a brain left after all the brain-washing by the media and immoral rounds of bailouts, bail-ins, rescues and refinances can do is play along, go along or go one's own way, the latter of which is highly refreshing and the only proper course of action.

Five years into the global currency melt-down, carnage is everywhere, the rich are even richer, the middle class on the endangered species list and the bottom tier nothing more than debt slaves for life.

This is not your father's America. It is not even the America you grew up into, if you are more than 30 years of age. This is an abomination, a monstrosity of complexity, a leviathan more frightening than even Thomas Hobbes could have dreamt.

Happy sailing, oh rudderless ones!

Dow 15,460.92, +169.26 (1.11%)
NASDAQ 3,578.30, +57.55 (1.63%)
S&P 500 1,675.02, +22.40 (1.36%)
NYSE Composite 9,493.21, +152.52 (1.63%)
NASDAQ Volume 1,680,093,125
NYSE Volume 3,796,463,500
Combined NYSE & NASDAQ Advance - Decline: 5246-1307
Combined NYSE & NASDAQ New highs - New lows: 772-21 (abominal!)
WTI crude oil: 104.91, -1.61
Gold: 1,279.90, +32.50
Silver: 19.96, +0.791

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