Anybody who owns stocks or has a portfolio in a retirement fund, 401k or other equity-style investments is well aware of just how good 2017 was.
All indications are that 2018 will be just as good, and probably better.
There's a number of reasons for this prognosis.
First, it's more than apparent that global stock markets are now completely under the purview of the global elite central banks, and that this central banks are actively buying stocks, boosting the underlying asset prices in the process.
Second, after that, nothing really matters, since central banks can create money out of the ether, at will, any time, for any purpose. Economics has been flipped upon its head. Price discovery has been delegated to a function of the central banks, i.e, they set the prices. No fundamental analysis is needed, nor will it be valid.
Since the goal of central banks is to keep their money ponzi schemes intact via their various currencies - pound, dollar, euro, yen, yuan - and the stock markets are primary vehicles, there exists almost zero chance of stocks losing value over even the short term. A longer-term decline would be unthinkable as it would destroy the fiat money that central banks employ in their quest to continue their global finance monopoly.
Knowing all of that, there's no reason anybody should invest in anything other than stocks, or, for added assurance, an index fund which tracks the Dow, S&P, NASDAQ, or all three, weighted, or otherwise.
Stocks will never go down again, at least not for any extended period of time.
Just Buy The Dips.
At the Close, Monday, January 8, 2018:
Dow: 25,283.00, -12.87 (-0.05%)
NASDAQ: 7,157.39, +20.83 (+0.29%)
S&P 500: 2,747.71, +4.56 (+0.17%)
NYSE Composite: 13,114.35, +11.12 (+0.08%)
Showing posts with label price discovery. Show all posts
Showing posts with label price discovery. Show all posts
Tuesday, January 9, 2018
Thursday, June 8, 2017
Something Is Not Working And It's Called Price Discovery
On Thursday, stocks closed the day essentially flat, with the exception of the NASDAQ, which seems to go up continually, no matter what the news, data or geopolitical conditions.
Oil slipped a little after being pumped and dumped. Precious metals were slammed without mercy, another annoying feature of the central banking control clique.
There seems to be a missing mechanism somewhere in this busted system, such as the one that transfers money from corporations to worthy shareholders or that can actually present a rational value for gold and silver.
It's called price discovery and there hasn't been an honest mechanism for such since 2009, probably earlier.
Like everything else, including the senate testimony of one former FBI Director James Comey, the stock market is built upon a mountain of flimsy propositions, most of which make little to no economic sense, unless, of course, one believes that borrowing insane amounts of money and printing even more will bring prosperity.
Hogwash.
At the Close, 6/8/17:
Dow: 21,182.53, +8.84 (0.04%)
NASDAQ: 6,321.76, +24.38 (0.39%)
S&P 500 2,433.79, +0.65 (0.03%)
NYSE Composite: 11,676.79, +9.06 (0.08%)
Oil slipped a little after being pumped and dumped. Precious metals were slammed without mercy, another annoying feature of the central banking control clique.
There seems to be a missing mechanism somewhere in this busted system, such as the one that transfers money from corporations to worthy shareholders or that can actually present a rational value for gold and silver.
It's called price discovery and there hasn't been an honest mechanism for such since 2009, probably earlier.
Like everything else, including the senate testimony of one former FBI Director James Comey, the stock market is built upon a mountain of flimsy propositions, most of which make little to no economic sense, unless, of course, one believes that borrowing insane amounts of money and printing even more will bring prosperity.
Hogwash.
At the Close, 6/8/17:
Dow: 21,182.53, +8.84 (0.04%)
NASDAQ: 6,321.76, +24.38 (0.39%)
S&P 500 2,433.79, +0.65 (0.03%)
NYSE Composite: 11,676.79, +9.06 (0.08%)
Wednesday, September 18, 2013
Surprise! Fed Ponzi Scheme Not Working, Will Continue
No change in asset (ha, ha, ha, ha) purchases.
The Fed is content to continue buying worthless paper with make-believe money they create out of thin air.
Sending this money mainly to the primary dealers via zero interest rate policy and repo actions, the dealers become free to speculate in whatever assets they believe worth pursuing, driving prices, in the main, higher.
The next magic trick is more difficult. These primary dealers are supposed to lend out their unallocated capital into the market, creating debt, which is, after all, the only goal of fractional reserve bankers.
Essentially, by changing nothing - even though the Fed hinted strongly that asset purchases would be "tapered" and the markets expected as much - the Fed is telling the world that their stimulus programs have not resulted in the expected results. Inflation remains below their desired threshold, unemployment remains stubbornly high and economic growth continues to be muted, the GDP, even with hedonic adjustments and recent additions, failing to achieve three percent annualized in any quarter since the collapse of 2008-09.
So, everything stays the same. The Fed keeps buying $45 billion of worthless government debt and $40 billion of even more destructive and toxic mortgage debt (toxic because price, or par, is at an excessive, unrealistic level) every month, in hopes that the combined markets which fuel the economy will continue to stumble forward.
Contemporary and classic theories of economics both say this kind of activity can lead to no good. Eventually all assets become overpriced in terms of a depreciating currency to the point at which the currency is no longer accepted in trade. Until the malinestments are purged from the system, normalcy in markets cannot occur, and guess who is holding most of the bad investments.
Central banks, particularly the Bank of England, the European Central Bank (ECB), Bank of Japan (BOJ) and, surpassing them all by levels of magnitude, the US Federal Reserve will end up holding most of the world's assets. Central banks are cornered without escape. They must keep devaluing their currencies in order to service burgeoning debt set against faulty assets. In terms of bubbles, the central banks of the developed nations are the world's greatest bubble and when that pops, there will be true freedom in economies, currencies, prices and price discovery. Not until.
More than anyone else, David Stockman has captured the essence of the current economic climate by use of the word "deformation." The global economy is deformed, distorted, obtuse and opaque. All price discovery mechanisms have been distorted out of recognition by the continuing debasement of currencies.
Even though nothing changed, markets behaved as if something had. Stocks roared to new highs on the Dow and S&P 500, but, here's the kicker: by percentage, hard assets were the most appreciated on the day. Commodities, particularly crude oil, gold and silver all outpaced stocks by multiples. Gold surged 4.5%, silver up 7.5%, crude gained a paltry 2.5%, making the sloppy one percent returns in stocks look like a piker's paradise.
The ramifications of today's Fed (in)action are monumental and trend-setting. So much so, that they cannot be easily disseminated and pursued in a single blog post, though they will have enduring effects, which Money Daily will continue to report upon in the days, weeks and months ahead.
Happy Hunting! Free Houses for Everybody!
Dow 15,676.94, +147.21 (0.95%)
Nasdaq 3,783.64, +37.94 (1.01%)
S&P 500 1,725.52, +20.76 (1.22%)
10-Yr Bond 2.71%, -0.14
NYSE Volume 4,410,661,500
Nasdaq Volume 1,769,496,125
Combined NYSE & NASDAQ Advance - Decline: 5052-1648
Combined NYSE & NASDAQ New highs - New lows: 565-51
WTI crude oil: 108.07, +2.65
Gold: 1,366.40, +58.80
Silver: 23.18, +1.616
The Fed is content to continue buying worthless paper with make-believe money they create out of thin air.
Sending this money mainly to the primary dealers via zero interest rate policy and repo actions, the dealers become free to speculate in whatever assets they believe worth pursuing, driving prices, in the main, higher.
The next magic trick is more difficult. These primary dealers are supposed to lend out their unallocated capital into the market, creating debt, which is, after all, the only goal of fractional reserve bankers.
Essentially, by changing nothing - even though the Fed hinted strongly that asset purchases would be "tapered" and the markets expected as much - the Fed is telling the world that their stimulus programs have not resulted in the expected results. Inflation remains below their desired threshold, unemployment remains stubbornly high and economic growth continues to be muted, the GDP, even with hedonic adjustments and recent additions, failing to achieve three percent annualized in any quarter since the collapse of 2008-09.
So, everything stays the same. The Fed keeps buying $45 billion of worthless government debt and $40 billion of even more destructive and toxic mortgage debt (toxic because price, or par, is at an excessive, unrealistic level) every month, in hopes that the combined markets which fuel the economy will continue to stumble forward.
Contemporary and classic theories of economics both say this kind of activity can lead to no good. Eventually all assets become overpriced in terms of a depreciating currency to the point at which the currency is no longer accepted in trade. Until the malinestments are purged from the system, normalcy in markets cannot occur, and guess who is holding most of the bad investments.
Central banks, particularly the Bank of England, the European Central Bank (ECB), Bank of Japan (BOJ) and, surpassing them all by levels of magnitude, the US Federal Reserve will end up holding most of the world's assets. Central banks are cornered without escape. They must keep devaluing their currencies in order to service burgeoning debt set against faulty assets. In terms of bubbles, the central banks of the developed nations are the world's greatest bubble and when that pops, there will be true freedom in economies, currencies, prices and price discovery. Not until.
More than anyone else, David Stockman has captured the essence of the current economic climate by use of the word "deformation." The global economy is deformed, distorted, obtuse and opaque. All price discovery mechanisms have been distorted out of recognition by the continuing debasement of currencies.
Even though nothing changed, markets behaved as if something had. Stocks roared to new highs on the Dow and S&P 500, but, here's the kicker: by percentage, hard assets were the most appreciated on the day. Commodities, particularly crude oil, gold and silver all outpaced stocks by multiples. Gold surged 4.5%, silver up 7.5%, crude gained a paltry 2.5%, making the sloppy one percent returns in stocks look like a piker's paradise.
The ramifications of today's Fed (in)action are monumental and trend-setting. So much so, that they cannot be easily disseminated and pursued in a single blog post, though they will have enduring effects, which Money Daily will continue to report upon in the days, weeks and months ahead.
Happy Hunting! Free Houses for Everybody!
Dow 15,676.94, +147.21 (0.95%)
Nasdaq 3,783.64, +37.94 (1.01%)
S&P 500 1,725.52, +20.76 (1.22%)
10-Yr Bond 2.71%, -0.14
NYSE Volume 4,410,661,500
Nasdaq Volume 1,769,496,125
Combined NYSE & NASDAQ Advance - Decline: 5052-1648
Combined NYSE & NASDAQ New highs - New lows: 565-51
WTI crude oil: 108.07, +2.65
Gold: 1,366.40, +58.80
Silver: 23.18, +1.616
Tuesday, May 24, 2011
The time has come, at last.
Almost anybody who is anybody on Wall Street is in agreement that the Fed's POMO-and-ZIRP-induced party has come to an end, and like all good party-goers, the hangovers are beginning to be felt.
Laughably, Goldman Sachs, the evil giant squid which everyone loves to hate, expects the party to go on without end, today boosting its outlook for oil to something ridiculous at about $130/barrel. Somebody needs to ease the Goldman boys away from the punch bowl, because they've obviously had too much. It takes less than a genius rationalization to understand that if everything begins going in reverse, oil cannot be priced higher. This simple, fundamental fact has apparently escaped the great minds in Goldman's glassy, lower-Manhattan towers.
Elsewhere, Greece steps closer and closer to defaulting on its debt. Not that Greece might one day default; it is an eventuality, and the sooner it gets over with it, the better. Yields on 10-year greek bonds have been running at about 25%, which would be a real find if they were actually going to pay them back. Of course, they're not, so whomever is loaning them money (there are a lot of silly people in this world) is exacting a pretty hefty price for the privilege.
Stocks went up, then down, then back up and finally, down into the close, a nifty continuation trade that began a few weeks ago and has been gathering momentum. The close today was rather dramtic, with loads of selling on pretty solid volume. Sooner or later, there will be a final flushing out of all the weak hands - and there are many - and a cataclysmic collapse in all the US - and global - stock indices.
We are heading into a frightening period of economic history, as nothing less than the actual value of money will be center stage. Today, $10 US could buy a couple of raw 8 oz. steaks of less-than premium quality. Tomorrow, who knows, maybe the same money could buy only a pound of bologna, or perhaps one could purchase premium sirloins. It all depends on the politics, the players and the public's acceptance of the value of a dollar, or two, or ten.
For the present, the US dollar still holds some value and still buys oil globally. That is the good news. The bad news is that there are a multitude of competing currencies, pricing strategies and unknowns that could change the course of economic history in a very short time. As the Fed unwinds its massive funding and balance sheet, all manner of nastiness could occur, though the current betting is on a mild dose of deflation, probably through the end of this year and into the first and second quarters of next. In other words, another year of fear, uncertainty and doubt (FUD). After that, nobody knows, so plan accordingly. HA, ha, ha.
Dow 12,356.21, -25.05 (0.20%)
NASDAQ 2,746.16, -12.74 (0.46%)
S&P 500 1,316.28, -1.09 (0.08%)
NYSE Composite 8,252.46, -15.91 (0.19%)
Not unexpectedly, declining issues bettered advancers, 3587-2941. NASDAQ new highs: 48; new lows: 79. NYSE new highs: 74; new lows: 32. Combined new highs: 122; new lows: 111. A tenuous win for the bulls, but on slight, sell-weighted volume.
NASDAQ Volume 1,880,249,750
NYSE Volume 3,867,757,500
Crude oil popped back over $100 per barrel on the back of Goldman's call, but it didn't hold, finishing with a gain of $1.89, to $99.59. Gold tracked higher by $8.10, currently at $1525.30. Silver blasted higher by $1.50, to $36.57. Apparently, faith in physical silver holdings has regained some degree of confidence, though there will certainly be more raids led by JP Morgan, hoping to keep a lid on the price. That's another eventuality; Morgan will fail.
Cash continues to hold a place of prominence in a multitude of portfolios, and for good reason. Bargains pop up nearly every day, and savvy buyers are keen to take appropriate advantage, though they should beware, as price discovery is more than ever more art than science.
Almost anybody who is anybody on Wall Street is in agreement that the Fed's POMO-and-ZIRP-induced party has come to an end, and like all good party-goers, the hangovers are beginning to be felt.
Laughably, Goldman Sachs, the evil giant squid which everyone loves to hate, expects the party to go on without end, today boosting its outlook for oil to something ridiculous at about $130/barrel. Somebody needs to ease the Goldman boys away from the punch bowl, because they've obviously had too much. It takes less than a genius rationalization to understand that if everything begins going in reverse, oil cannot be priced higher. This simple, fundamental fact has apparently escaped the great minds in Goldman's glassy, lower-Manhattan towers.
Elsewhere, Greece steps closer and closer to defaulting on its debt. Not that Greece might one day default; it is an eventuality, and the sooner it gets over with it, the better. Yields on 10-year greek bonds have been running at about 25%, which would be a real find if they were actually going to pay them back. Of course, they're not, so whomever is loaning them money (there are a lot of silly people in this world) is exacting a pretty hefty price for the privilege.
Stocks went up, then down, then back up and finally, down into the close, a nifty continuation trade that began a few weeks ago and has been gathering momentum. The close today was rather dramtic, with loads of selling on pretty solid volume. Sooner or later, there will be a final flushing out of all the weak hands - and there are many - and a cataclysmic collapse in all the US - and global - stock indices.
We are heading into a frightening period of economic history, as nothing less than the actual value of money will be center stage. Today, $10 US could buy a couple of raw 8 oz. steaks of less-than premium quality. Tomorrow, who knows, maybe the same money could buy only a pound of bologna, or perhaps one could purchase premium sirloins. It all depends on the politics, the players and the public's acceptance of the value of a dollar, or two, or ten.
For the present, the US dollar still holds some value and still buys oil globally. That is the good news. The bad news is that there are a multitude of competing currencies, pricing strategies and unknowns that could change the course of economic history in a very short time. As the Fed unwinds its massive funding and balance sheet, all manner of nastiness could occur, though the current betting is on a mild dose of deflation, probably through the end of this year and into the first and second quarters of next. In other words, another year of fear, uncertainty and doubt (FUD). After that, nobody knows, so plan accordingly. HA, ha, ha.
Dow 12,356.21, -25.05 (0.20%)
NASDAQ 2,746.16, -12.74 (0.46%)
S&P 500 1,316.28, -1.09 (0.08%)
NYSE Composite 8,252.46, -15.91 (0.19%)
Not unexpectedly, declining issues bettered advancers, 3587-2941. NASDAQ new highs: 48; new lows: 79. NYSE new highs: 74; new lows: 32. Combined new highs: 122; new lows: 111. A tenuous win for the bulls, but on slight, sell-weighted volume.
NASDAQ Volume 1,880,249,750
NYSE Volume 3,867,757,500
Crude oil popped back over $100 per barrel on the back of Goldman's call, but it didn't hold, finishing with a gain of $1.89, to $99.59. Gold tracked higher by $8.10, currently at $1525.30. Silver blasted higher by $1.50, to $36.57. Apparently, faith in physical silver holdings has regained some degree of confidence, though there will certainly be more raids led by JP Morgan, hoping to keep a lid on the price. That's another eventuality; Morgan will fail.
Cash continues to hold a place of prominence in a multitude of portfolios, and for good reason. Bargains pop up nearly every day, and savvy buyers are keen to take appropriate advantage, though they should beware, as price discovery is more than ever more art than science.
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