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  • docjoe999 docjoe999 Feb 19, 2013 1:05 PM Flag

    The market is totally distorted from reality

    I caught up on the financial data this weekend. Sure, the U.S. GDP was down 0.1% last quarter. I knew that. What I didn't know was Japan's was down by a similar amount, and that Europe's total GDP was down 0.4%. I know Musk and his buddies in the media keep crowing on about stimulus working, but what is their gauge? Jobs? Nope. GDP? Nope. The stock market? Of course.
    Technically, a recession is two quarters of negative GDP growth, and we are not there yet. For those of us in the real world though, the great recession never ended. It only ended for those sucking from the Fed drinking fountain and the few drops given to others.
    Why is the Euro up so much while the European economies are in shambles? Because the Fed is handing European banks boat loads of money. So we live in this bizarro world where Spanish bonds have been a great investment while Spanish unemployment soars ever higher. So Musk drones on about stimulus working, and it has worked for the bankers. But for people under 25 in Spain, with a 55% unemployment rate, can anyone tell me how it worked? Spanish unemployment overall is at 26%... which is higher than at the peak of the Great Depression in the U.S. The very idea than that stimulus works is a joke.

    ZH had a story that 121% of the gains with stimulus went to the top 1%, and that the bottom 99% saw its wealth shrink. And this happened during a Democratic presidency. Forget about why Kansas is voting the way it is. How about why did anyone in the bottom 99% vote for Obama?

    Maybe the Walmart data will show that buying off the 1% won't work. Walmart's Feb sales were the worst in seven years.

    Does anybody else notice what has happened in the U.S.? We have become a more prosperous version of the old USSR. A centrally planned economy, civil rights shattered, fat cats not going to jail, all our correspondence being monitored, price fixing in the medical field, rationing of bullets and pain medications, divorce courts who place need over merit? And this was all done under the guise of safety? Unreal.

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    • "Maybe the Walmart data will show that buying off the 1% won't work. Walmart's Feb sales were the worst in seven years."

      Good post Doc, echoes a lot of my thoughts on these issues.

      So much Stimulus so little enduring effects for the real economy.

      Predictable too.

    • BTW, I agree mArkets are distorted. They are in mush better shape than they would be without stimulus. They are distorted Ina positive direction. his is hardly controversial, it it the opinion of virtually every mainstream economist and business leader.

      • 1 Reply to musketeernumberone
      • Hey, I might even agree that markets and ecomomies are better off mid term as a result of the stimulus, but at what cost musk ? Kind of a no brainer when you don't count the cost of easy money. How many times do I have to say it.... THERE IS NO FREE LUNCH.
        As for the stock market doubling in four years... that's just great for us market times. For mom and pop unsuspecting investors... no so good. The broad markets have gone almost nowhere in 10 years.
        http://finance.yahoo.com/q/ta?s=%5EGSPC+Basic+Tech.+Analysis&t=my
        The last time I did the math, a 50% loss requires a 100% gain to break even. The only savior being a dividend check. So I imagine somebody buying a 10 year bond 10 years ago might have done better than buy and hold in the stock market. That said, the government today is discouraging sitting on cash. It's obvious the government prefers as many people as possible spending their cash... no storing it.


        Yes, I might subscribe to that as a better scenario in the long term for the country as well as for individuals.

    • doc.... you are correct again.
      Problem is, correct doesn't always pay off in this crazy world. Being correct economically, politically, fundamentally... however you want to describe it.... it doesn't always translate to the financial payoff in today's real world. And we all know why... to much tinkering. Interest rates are not where they should be, the price of oil and gasoline are not where they should be, currency exchange rates are bogus. UE does not match up with growth, government spending does not match income... etc.
      The 99% voted for BO because they believe that he represents them more than the the GOP candidates did. MR & JM were lack luster GOP candidates, BP got wins by default. I know people that voted by BO that don't agree with many of his policies, but they vote for him anyway because he gives good speeches, and the
      illusion that he can lead.
      I agree doc, it's an illusion, and will likely come crashing down again like it did a few years ago. In the meantime, don't fight the tape. In the words of Alan Greenspan... "markets can remain irrational longer than you can remain liquid.

      • 1 Reply to rgneckow
      • Right: don't fight the tape.

        Doc has been brain-washed by ZH. For the sake of accuracy: 1 Q of bad numbers is not a trend. The trend in the series since the depths has been up. Private sector employment? Up. GDP? Up. Federal tax receipts. Up. Corporate profits? Up. The stock market? Up, of course. We have had 4 years of expansion. Of course, that cannot go on forever. I for one never said it would.

        Data is Data and opinon is opinion... no need to confuse the two.

        Meanwhile... Spain is f'ed and I never said otherwise. And all that bunk from ZH and others about the euro crashing and the zone dissolving... Not in the real world, not so far . Major Spanish banks are in better shape than they were and, yes, thanks in large measure to the Fed. Why blame the Fed for it´s successes -- I just don´t get it. It costs us nothing to save the European financial system Why not do it? (I say it costs nothing... we are creating "money" out of thin air, isn´t that right? Inflation? Only the "stealth inflation" one reads about on ZH while nursing the shame of them being wrong for 4 years with shots of Makers Mark.)

        The assault on civil liberties began under Bush, but I agree it has gotten worse. Unfortunately, the mind-set of war has infected the entire political establishment. Amazing the dirty snowwball that has grown from a few lies.

        Meanwhile, Americans are freer to smoke pot and get marrried to the people they love than ever before. I guess you win some and lose some.

 
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