Dr. Ben just said that interest rates will remain near ZERO for a long time. In case you're an idiot, that means that there's no place left to go except stocks. Okay, wise guy, where, GOLD, huh? Get real moron.
So long as Da Fed is pumping da market, in a vain attempt to reduce unemployment, stocks are da onlyest game in town right now. Da Fed can't stop, even if they wanted to. Here's why.
Da rising debt makes some type of QE more likely, since higher interest rates would take a HUGE bite out of da budget, and neither Pubs or Libs wanna give up their special interest. Also, da biggest increase in state & fed. gov. tax receipts is,...... you guessed it, tax on short-term cap gains. Da Fed mortgage program is also rising housing values, increasing property taxes for local governments. No way they're gonna go back to an unmanipulated, free market. Trust me on this.
C Yaz - Da Bear Cares -[CGDGE] ( A time will come when you need to dump every stock you hold, and go short if you got da balls, but, that time will probably be after da 2016 election. There's no reason why we can't see P/Es of 30, given these insanely low 10 year rates. Unfortunately, we're looking at a 20 year global depression when that occurs. History will not be kind to Greenspan, Bernake & Yellen. )
Bond investors are by nature very conservative. So, when Da Fed buys $45B in TBs, most of that money goes back into low interest rate CDs, and some, about 7%, into da market. Recently, however, less is going into CDs, and more into da market, which accounts for the lower volume, but higher prices we see almost every month. Da $45B MBS follows a similar path, but, more ends up in da market because there is less demand for more bonds. Recent statistics show that an increasing percent of that Fed bond fest is ending up in major ETFs, like SPY, DIA & QQQ.
Da Fed must know we're getting close to bubble mode, with a P/E getting closer o 20, da point where they'll target da market, fearing they did something wrong. That's where you need to get out, or, lose all your recent gains like a fool.
C Yaz - Da Bear Cares -CGDGE ( Trust me on this, at 20 P/E tapering commences to begin. )
What Da Gov won't tell yaz, but, Da Bear will.
Every month, BLS soldiers faithfully collect 2,500 prices on items which will be included in Da CPI headline inflation index, used to adjust government benifits and workers pay to urban wage inflation. Here's how they cheat. Think of technology products, like computers, tablets, kindles and nooks, cameras, etc. Puters are dropping in price about 25% each year, assuming da same model with an older chip. Tech products, if heavily weighted, can offset 10% - 15% gains in healthcare, energy and food costs.
If da inflation rate were computed on goods used prior to 1988, when they learned how to do it under Regan, da urban CPI would be reported around 6.9% today, about 5.3% higher than currently reported. They fudged da numbers to screw seniors outta their SS, but, they also f_cked over da minimum wage earners who depend on that wage to maintain their living standard.
Da sad fact is this, Pilgrims, if Yinz wanna reduce unemployment significantly ya gotta follow Adam Smith, Da Law Of Supply and Demand. We're in a global economy, which means our labor competes directly with India, China, Vietnam, Tailand, etc. Ya don't have to reduce nominal wages, just let Da BLS keep screwing seniors and minimum wage workers by under reporting urban CPI, and eventually workers and seniors will be receiving enough to barely live on, and die off faster.
C Yaz - Da Bear Cares [CGDGE] ( Screwing seniors outta their benifits-especially healthcare-will kill them off faster. Da money they leave to their kids, and kids of kids, will be better than a winning lottery ticket for mommy and daddys with savings. Poor mommy and daddys aren't helping anybody when they actuarially mature, so, they should be kept alive for as long as possible until their healthcare costs exceed their SS + pension benifits.)
Pebs, Pebs, Pebs ....I remember that board well. Update on Kiki. Her real dad died in a Russian gulag 5 years ago. Her sister Titi is working as a waitress in NYC, she's been married twice, but, currently looking for an older man-LIKE YOU-especially if you will buy her that new corvette like I told her you promised!
Kiki came back to the US after her dad's unfortunate end. She got off her drug habbit and landed a job modeling in NYC. She won't talk to Titi and hates her mother. I won't even get into that.
I'll be in NJ for an electrogravitic conference, friday da 13TH in december. If ya wanna hoist a few, let me know.
C Yaz - Da Bear Cares [CGDGE) ( Pebs, I figured you as da smartest accountant on these here message boards. Now, why da #$%$ did you buy E-Tub, huh? Stay thirsty my friend. )
I am come
to speak of a sum
E-Tub & $7.01
I know its no fun
da money you'll lose is a ton
but I am not done
is still to come
it will fool some
but Da Bear's wait is not done
C Yaz - Da Bear Cares [CGDGE] ( sorry I had to leave Yinz for a bit, but, me boss is in Deutschland till next year and I'm full time till then. Fear not, I'll be back to strike fear in thems who are in over $7.01, at random intervals. I'm a stochastic Bear and cannot be predicted with certainty. )
For da last 5 years it didn't work out well, even for those who got in at the bottom of those nasty corrections. Consider that your 15% - 28% ordinary income tax on short term gains (my 25%), and unless ya'll hit da exact bottom and top, Yinz probably lost a whole heap of capital ya didn't have to. Consider gaps, taxes, commissions and bad timing and very few made out trading this market.
I don't even wanna hear it from you shorts. I shorted everything for a couple of years back in 07 - 09. Once they started TARP and bailing out da banks, I took Rick Santilli's advice; DRINK FROM DA BAIL PAIL!
This Bull has another 3 years to run. It won't end till Fall, 2016, right before da 2016 election. Two things will happen around then. First, companies will run out of cost cutting and asset sales to make earnings ( lower top line, higher bottom line). Second, da public will be sick and tired of QE and Da Fed. With cost of living rising 2x da COLA rate, everybody will finally figure it out., they (BLS) can make CPI anything they want. Yinz who doubt believe this need to know what's in them there 2,500 items da BLS uses to compute da urban CPI. They like to use a lot of techno products that have 25% - 25% annual price declines in their "basket of goods and services'"
C Yaz - Da Bear Cares [CGDGE] ( Betcha we hit $245 - $270 on Da SPY before Doom & Gloom set in. Go ahead, make my day PUNK! )
Anybody silly enough to be out of this market since da start of QE, or buy protection (puts), lost money or had their returns signifcantly reduced. Ya just shouldn't fight Da Fed, those that did are DEAD.
Look, everybody with a brain larger than a pea knows that when they-Da Fed-stop QE we're gonna see Da Mother of All Cra$hs, and morph into Da Mother of All Recessions for a generation. Here's why.
Since Yellen will be da new bossman, errrr, bossmam, expect Benny QE on steroids. Trust me on this, okay?
With negative real rates, we could see da market trade on a PE of 25 - 35 before da Bear comes outta hibernation. When, huh?
Ans: a couple or three months around election time 2016.
C Yaz - Da Bear Cares [CGDGE} (Here's what Da Bear orders y'all to do: stay long, don't buy no puts, and don't sell nothing till I tell ya.)
Quaranteed, when those who panicked and sold at da Mar. 2009, lows get greedy and start buying at da top. It's utterly amazing how this cycle repeats. S&P's PE is around 16.1, in da normal range based on historical measures. A good bubble is north of 20, but, considering that da 10 year TB is less than 2.60%, that bubble top may be a PE north of a PE of 25.
You'll know it when you see it, major outflows from MM and bond funds where most of da panicked Pilgrims fled to when it looked like da end of da financial world back in 2009.
C Yaz - Da Bear Cares [CGDGE} ( I bet we see at least $250 to $320 SPY before da biggest, longest and most devastating crash in da history of da stock market, probably around da end of Obama's term in 2016. It's ironic, da most business unfriendly president ever will oversee da biggest bull run in history. Go figure. Buy Pilgrims, this market has a lots of room to run while we have negative real interest rates, AND I"M A REAL BEAR! )