when the bubble pops they will be crying yet again. markets up 40% because of Federal Reserve manipulation. Anyone long in the market should have sold weeks ago.
so many just don't understand most stocks are a bargain right now, and we are in a secular bull market. it doesn't matter if people can't afford their houses or have jobs. those things have nothing at all to do with stocks being a good investment.
if you take the WORST CASE SCENARIO, hyper inflation, owning hard assets and equities is the ONLY way to protect yourself. stock prices, realty prices, commodity prices will ALL hyper inflate as the dollar goes to 0. you do NOT want to be short anything with this very real threat hanging over us.
and yes, the fed WANTS inflation. they see it as a way out of our debt. it will ruin the savers with cd's, and the poor people with no incomes as bread goes to $25/loaf, but houses will go back up. funny how they see that as the major problem here. the bigger problem is it may cause a war with countries holding our debt, as they see their dollar asset become worthless due to currency manipulation.
buying gold has a real appeal here, you can put it in the mattress, and barter with it, or convert it to dollars as needed, and it will be tax-free, as the government can't track your huge profits.
That's the point of QE. Money flees out of savings into the stock market so Wall Street can say "see how great the markets are?" and then "now give me my bonus before the cap. gains goes to 20%". They get a bonus and the market tanks , in January, and we don't see real recovery start until 2014.
"Does nobody equate that zero percent interest rates have done nothing"
Excellent point. Money has been cheap as dirt, for a long time now, and this to no effect on the economy at large. It's already proven to be a loser in this economy.
I agree with you guys regarding the shakiness of the economy and the fact that the Fed is doing its best to inflate values. But the Fed can inflate values for a long time before it all comes crashing down. It's a bitter situation, the nimble few on Wall Street benefit disproportionately compared to the rest of the country. But the fact remains that the Fed can actually make this happen with massive quantitative easing. So how does one guess when the bubble pops? A year from now? Two years from now? It's an absurd situation, but the reality is that investors have to deal with this absurdity.
"But the fact remains that the Fed can actually make this happen with massive quantitative easing."
The buy volume in this "rally" discounts any premise that smart money is buying this rally. I don't understand the concept that firms are going to go into inordinate risk, just to help Benny manipulate the economy. I didn't know capitalists were suddenly so altruistic, ready to fall on their swords and throw all their money into SPYs and the like, at a market top, at that. If so, where's all the volume gone? How is it that we can assume all the Wall Street corporate investors (note insiders massively are fleeing the market) are dumber than your average investors, who went AWOL on stocks and into vehicles they perceive as safer, like cash or bonds? (Though I wouldn't agree a lot of bonds are a smart play, at all, but they are perceived as safer by the masses.) If everybody is seeing these new QE2 funny money market glories ahead, why is the volume dropping like a rock, the more tired this "rally" gets? Hmmm... May make one wonder.
"Anyone long in the market should have sold weeks ago."
Lately, I keep coming back to looking at past recessions. If you take, for instance, the early-mid 1970's recession, the market reverted back into deep value territory, in a recession that was far, far less serious. (None of the catastrophic problems we’re facing like sovereign debt, a real estate collapse, etc. Nobody was talking collapse of anything back then.) So, the concept this market is worth its current price is historically unsupported, as long as data has been kept. Google on “Q Ratio” of the market, which spells volumes how overvalued this market is, for a recession this deep. The current situation is more 1930's than anything else. Yet we're supposed to believe we're going to suffer less than in the 1970's?