Barry Ritholtz: Stick With "What's Working" and Don't Fight the Fed

@ Thomas you are an idiot; Do you seriously think the seniors are well in the Republicans Hands.

The funding for the Republicans are only interested in their Profit!
Not SENIORS!

This was nicely said!

Maybe you can't short this joke of a market -- but you have to be out of your mind to buy this overvalue scam & artifice wholly based on EPIC & PERVASIVE FRAUD embedded in the ENTIRE SYSTEM!

And I'd fade anyone who says "don't fight the FED" when the FED has been DEAD WRONG for more than a decade!

PLEASE WAKE UP!!!!

THE WHOLE THING IS A BIG ZERO!!!!!!!

Here's the short version of what's happening and what's finna happen. QE 2 will devalue the dollar as much as necessay to avoid deflation.5%? 50%? Who knows? The 11% devaluation since June gave us a 1% uptick that was gone in a couple weeks. We are back at1% , which is dangerously near deflation. I'm optimistic that we will not have deflation , which could lead to another recession or worse. I predict that we will have a burst of inflation next year and that the dollar will drop at least another 5%. This will be good for exports. Germany exported a third of its GDP for decades and is probably near 50% now. It was at 40% in January and its economy has surged this year. This sun is smiling on us. I predict the 50% that the S&P500 earn abroad will become 66% of total revenues next year. Many large caps, as a result of these two factors, should be worth 50% more by 2012. I just bought Exom. The domestic economy will continue to grow. Don't believe the boo about the banks. The Fed has shown that they will subsidize the banks. Note that all roads seem to lead to inflation. Believe me if the Fed has to devalue the dollar 90% to avoid deflation it will. I don't see more than 5%. The other big positive that absolutely no one else is talking about is the underground economy. It used to be estimated at 30% of the reported economy, but that was before the Net and 17% unemployment. They are being forced into the underworld of illegals, working off the books, flea market/garage sale nation, sex drugs and rock and roll. There has alway been tax evasion. The 17% have to eat. Add another 4 trillion to the reported GDP-Maybe 5 trillion next year. This helps to explain the stellar corporate earnings we had had for the last 9 quarters, right thru the most severe recession in 80 years. Blue skies are smiling and I'm buying equities.

I want to respond to User's comments addressed to David. QE2 is coming and is absolutely necessary because of the powerful deflationary forces afoot. People naively believe that the Fed is merely trying to help the Recovery. It's much more than that. The recent 11% devaluation of the dollar resulted in an uptick from1% to 1 1/2%. in inflation. Nothing. I am not suggesting that inflation is good. It is not. But it is preferable to deflation, which is catastrophic. Bernanke would be happy with our 1 1/2% rate of inflation if he thought he could depend on it. He would be foolish to take this risk because if it were to slip into deflation it might result in an unstopable slide into Depression. Deflation makes it impossible for a producer to produce. He loses confidence in earning a profit as opposed to taking a loss from falling prices. Download it. In the Depression you could buy farmland for the deliquent taxes. The consumer price index dropped 40% .There's no point decrying it; QE2 is coming. The Fed may devalue the dollar another 11% to prevent deflation. If necessary, it could take the dollar lower than that. Put everything you have in inflatable assets. Monday I bought EXOM. I should have increased my position in COP, but I can"t complain. Buy something. Don't let the train leave the station without you.

all sernior citizens must vote against the democrats next month. Vote ur pocketbook people

You can buy tulips, worthless internet stocks, or million dollar homes with liar loans but it is all the same. If you are buying an asset whose value is denominated by the green rectangular lies our government prints, you are hoping that there will always be a greater fool. It is a path to great wealth as long as you don't end up being the greatest fool.

I do not like the action in the markets, so I took profits and got out of most of my Q's options, which I've been trading from the long side for the last couple of months or so.
It was fun while it lasted.
Maybe I'll change my mind next week.
Time will tell.

I do not like the action in the markets, so I took profits and got out of most of my Q's options, which I've been trading from the long side for the last couple of months or so.
It was fun while it lasted.
Maybe I'll change my mind next week.
Time will tell...

I thought Ritholz was hailed as having some special insight into the markets that other individual investors couldn't possibly have themselves?

Unfortunately, it doesn't seem as though his May prophecies have panned out yet. Judging by his large cash position, he may have hurt himself and his investors by bailing out during only a temporary pullback.

Dan interviewing Barry. Barry has been reduced to the B team of interviewees.