The Stock Market Boom

[Burke]

The govt wants money. It sells bonds to banks that create money out of thin air (via fractional reserve banking) to buy them. The Federal Reserve then creates money out of thin air to buy the bonds from the banks (Quantative Easing), and the banks use that money to buy stocks.

And the stock market soars.

How long do you think this crap can go on?

And what will happen to the stock market if the Fed stops printing money?

More importantly, what can possibly happen that will turn things around?

Banks can't give money away to businesses because the govt is so hostile to the business community no one wants to take a risk. If they go broke, they lose. If they make profits, the govt is there with its hand, er gun, out.

Everyone knows that the bond market is a huge bubble caused by Bernanke's bond buying and that it will eventually crash.

The only thing they can do is print more and more money.

So, what's going to happen first, a crash of the bond market or a crash of the dollar?

And can the stock market be far behind?

Then the whole economy.

Here and around the world.

The sky really is going to fall.

[thedyc09]

Seems to me that the Fed keeping interest rates at historic lows (seemingly without end) + inflation is forcing a lot of people to think the only way to get a return on their investments is to put it in stocks - guess who's going to win that gamble? Oligarchs 1, Middle Class 0.

[gatorman_07732]

Seems to me that the Fed keeping interest rates at historic lows (seemingly without end) + inflation is forcing a lot of people to think the only way to get a return on their investments is to put it in stocks - guess who's going to win that gamble? Oligarchs 1, Middle Class 0.

Yep, they react very positively to low interest rates. Trading volume is way down sind 2008 because people don't trust it.

[G8trGr8t]

companies of $500M and up are getting cheaper money, smaller companies are struggling to get money under 10%. Just more of the push for bigger, centrally planned companies monopolizing the economy. Combine the discounted $$ that bigger companies have access to with the cost of regulatory compliance and these policies are combining to eliminate the small to midsize companies. As more and more mergers and acquisitions ocur, more and more people are going to be losing jobs.

USAir-AA, office depot-office max, and other M & A activity is creating bigger companies that can be easier controlled by a central planning agency. America is changing to make it harder for people to create and develop small to mid size companies and the voters are letting/making it happen.

[madgator]

Yep, they react very positively to low interest rates. Trading volume is way down sind 2008 because people don't trust it.

we are watching the final destruction of american wealth.....onward to the new world order!


I have no doubt that part of the plan also involves a whole bunch of chaos that is going to result in the elimination of a people......also a stated part of the plan.


but we're all crazy because according to Paul Krugman the only problem is that the government is not spending enough! we are not printing enough!

[G8trGr8t]

Fed hinted at slowing down bond purchases today and bottom fell out. Note this wasn't a formal policy announcement and certainly not a discussion about totally stopping the presses but just a few members of the fed discussing slowing down the presses and the market dumped.

How can US talk to Japan about devaluation while we print at full speed? Maybe the rest of the G20 pitched a fit about US too.

[ThePlayer]

Unfortunately, we're the best horse in the glue factory.
But the equity party is about over...5% more at the most.
Some of these companies are being valued at 25 times earnings.
Ridiculous at the outset.

[ncgatr1]

Time for our resident liberal economic geniuses to weigh in on this. There seems to be a lot of smoke out there that this market could correct by up to 90%. I don't think it will be that severe but the chickens are coming home to roost, and our perennial commander in chief crusader will deflect this blame too. It seems the unemployment may go back over 8% and we are inching back to $4.00 a gallon for gas. I can't wait until we see the full impact of Obamacare. The stupid by choice should be real happy in a few years.

[Burke]

When people are free to produce and trade and keep the product of their labors, you have fabulous prosperity.

When you have looters in Washinton who are exploiting them, you have decline and deprivation.

Simple as that.

[PITBOSS]

....So, what's going to happen first, a crash of the bond market or a crash of the dollar?

And can the stock market be far behind?

Then the whole economy.

Here and around the world.

The sky really is going to fall.

with end-of-the-worlders its always just around the corner. so never any proof or confirmation. its just you-wait. :crazy:

[G8trGr8t]

http://money.msn.com/business-news/article.aspx?feed=OBR&date=20130220&id=16133361

NEW YORK (Reuters) - Stocks fell the most in three months and a key gauge of market volatility spiked on Wednesday after minutes from the U.S. Federal Reserve's most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected.

The minutes from the Fed's January meeting showed many officials voiced concern last month over potential costs of more asset purchases, suggesting that the program, known as QE, may slow before the pickup in hiring it was intended to deliver.

"What Wall Street wants to hear is an absolute sign that the Fed will continue with QE for the indefinite future. When it says we may end it faster, that just raises the uncertainty, and the market hates that," said Todd Schoenberger, managing partner at LandColt Capital in New York.

Wednesday's slide marked a rare return of nervousness to markets after their solid march higher this year. The CBOE Volatility index , or the VIX, a measure of investor fear, jumped 19.3 percent - the biggest daily gain for the VIX since November 2011.


meanwhile gas is pushing $4

[madgator]

http://money.msn.com/business-news/article.aspx?feed=OBR&date=20130220&id=16133361



meanwhile gas is pushing $4

read that article and tell me again that Obama has done nothing but create another bubble economy

[Burke]

No one can predict with certainty when the collapse will occur. But things are bad enough now that it could happen at any time.

I don't claim to be that knowledgeable, and if I can see it, pretty soon everyone will be seeing it.

Then this house of cards is going to fall.

Perhaps my outlook is skewed by my experience as a lawyer. But most of the time, when things look bad, you are seeing only the tip of the iceberg.

Know someone with a "little " drug problem? It's probably much worse than you know.

People are addicted to govt spending problems, and its worse than most realize, I believe.

[PIMking]

It's all bush's fault, or the Republicans, I'll ask my fiance

[PSGator66]

With reduced pay checks and high gas prices we will all suffer.

[fredsanford]

These predictions of doom have been coming since 1/20/09.

Actually, they are very similar to ones that started 1/20/93 and were parroted for 8 years. We saw how that turned out.

Chicken littles all.

[gatorman_07732]

These predictions of doom have been coming since 1/20/09.

Actually, they are very similar to ones that started 1/20/93 and were parroted for 8 years. We saw how that turned out.

Chicken littles all.

Well there is a lack of trust in general from the public as exhibited by the trading volume.

[reformedgator]

Ask the middle class of these past 4 years. To them, the sky probably feels like it has fallen on their heads.

[theorangebluewinagain]

I want a crisis yesterday. Hopefully Jappan and Europe crash soon. If the Washington folks watch it happen over there and then do nothing to fix things here then we need to remove them all either with our votes or by force.

[Burke]

What reason is there for optimism?

All of a sudden businessmen in this country are going to start investing, etc., to support Obama's welfare bum constituency?

The country is beyond the tipping point.

It took a war ( or really, FDR croaking) to get us out of the Great Depression.

What's going to happen this time?

A war with nukes?

What?

[theorangebluewinagain]

What reason is there for optimism?

All of a sudden businessmen in this country are going to start investing, etc., to support Obama's welfare bum constituency?

The country is beyond the tipping point.

It took a war ( or really, FDR croaking) to get us out of the Great Depression.

What's going to happen this time?

A war with nukes?

What?

History say these things always end in war. But the big question is, who against who? And what precipitates it? That is the 64 miliion dollar question. We know it ends in war.

[PIMking]

These predictions of doom have been coming since 1/20/09.

Actually, they are very similar to ones that started 1/20/93 and were parroted for 8 years. We saw how that turned out.

Chicken littles all.

You mean that great economy that Clinton had with a Republican house? But the republican president bush ruined it with a Democrat controlled house?

[T3goalie]

$85 Billion a month can add a nice coat of paint, a new deck, beautiful furnishings, bay windows, a new roof and other niceties to a structure infested with termites. Looks great from the outside...but like the law of gravity the termites eventually win. The Titanic is a perfect analogy... This is no different. There is nothing new under the sun.

The policies in DC are crushing the middle and lower class... disposable income and job opportunities are drying up. Fixed income seniors are pinched by less and less buying power (food ,gas, utilities). Minorities are more poorly educated, more dependent, have less opportunities, higher unemployment, higher drop out rates, higher poverty rates and yet the Pols tell them they care. A generation of idiots is enslaving themselves in debt with student loans of 150,000 to be paid like a mortgage to the gov't over decades. At the same time the masses love them... The Obama lady comes to mind. What a poor soul. She has no chance. Dependence and central planning = contraction...

[Burke]

The question is, why have they been able to do this?

Why is the greatest nation in history being over-run by parasites who, for the most part, are the descendants of traditional Americans?

In order to completely understand that, you just have to read Ayn Rand.

Fundamentally, its the prevalence of some very bad ideas in our culture.

Germany was the most cultured nation in the world, the "land of poets and philosophers."

About 140 years later, it had Hitler and his ovens.

Essentially, the same thing has been happening here.

[Burke]

We had an economic meltdown in 2008, primarily because of massive govt screwing around in the financial and housing markets.

We've spent trillions since (6, has it been?).

What do we have to show for it?

The imminence of a far worse collapse as soon as the Fed stops its massive money printing program.

All the govt has done is destroy, steal some and spread it around to make things look better for a while, destroy some more, steal some more, . . . .

When it comes, it will be very, very bad.

Their "solution " then?

A police state, wars, God only knows,

[T3goalie]

The question is, why have they been able to do this?

Why? ignorant and corrupt politicians... ignorant and entitled populace.

There are 2 basic reasons. First politicians are all bought an paid for by special interests and second they envision themselves being in charge and playing king. Both parties want control and to have control you must central plan. Look at Rick Scott as the most recent example. When the rubber met the road, he caved. Look at the GOP house majority leader and senate minority leader. They talk and posture but always cave to larger and more expansive government.

Rand wrote fiction where it is easy to see parallels. But Rand's novels are child's play compared to Hayek and Friedman. They wrote without the flair of a novel. "The Road to Serfdom" is spooky in that it reads like prophecy.

The simple fact is that the most productive country in the history of the world has become a consumer country living of credit and the largest debtor nation in the history of the world. The most productive people in the world have become the largest individual debtors. When production is replaced with consumption from credit you end up eating your young or just enslaving them in debt...

[Burke]

T3,

I would say that's a description of what's happening, not an explanation.

The question is why, what caused the changes?

I blame the public school system, but really, that's just a description and not an explanation, too.

Rand believed that political systems are products of cultural influences which, in turn, are the products of prevailing moralities, which are themselves products of underlying philosophies.

What are those ideas?

[T3goalie]

Rand believed that political systems are products of cultural influences which, in turn, are the products of prevailing moralities, which are themselves products of underlying philosophies.

Interesting point. I guess my view in a general is...

The "Greatest Generation" was born out of thrift and war. They were bred on individual responsibility and individual resourcefulness. They valued thrift, saved for the rainy day, they built highways and power plants, valued privacy and modesty, put a man on a moon, and family was at the core. They were a product of legal immigration via Ellis Island seeking opportunity not subsidy. The built for excess capacity. And to a great extent they minded their own business. They accepted that they were required to live with the consequences of their poor decisions. They did not want hand outs and were embarrassed to receive such.

Conversely The "Baby Boom" generation, aka the most worthless generation, was bred on "sex, drugs and rock and roll, do your own thing, never trust anyone over 30, free love, don't work too hard, everybody is famous for 15 minutes"... Now the Baby Boom generation is entrenched in education and government. They are the leaders of the world and have no cornerstone or foundation other than self indulgence. They build nothing, complain about everything, emote. They will sacrifice people towns/counties/industries for a spotted owl or snail and they view themselves superior to the generation that preceded them because they have more degrees in psychology and sociology. They value image over substance and demand to be subsidized. They claim to care but can neither recognize a problem or solve such. They will borrow and enslave themselves to give the appearance of success. They will borrow to enslave future generations for their own self indulgence and comfort. They live in a false reality in which kicking a problem down the road is an art form. They engage in the "morality of me" but want to suffer none of the consequences of their actions. A loss equates to victim hood.

It appears i agree with Rand on your point. Who knew?:joecool:

[dudehead]

Interesting point. I guess my view in a general is...

The "Greatest Generation" was born out of thrift and war. They were bred on individual responsibility and individual resourcefulness. They valued thrift, saved for the rainy day, they built highways and power plants, valued privacy and modesty, put a man on a moon, and family was at the core. They were a product of legal immigration via Ellis Island seeking opportunity not subsidy. The built for excess capacity. And to a great extent they minded their own business. They accepted that they were required to live with the consequences of their poor decisions. They did not want hand outs and were embarrassed to receive such.

Conversely The "Baby Boom" generation, aka the most worthless generation, was bred on "sex, drugs and rock and roll, do your own thing, never trust anyone over 30, free love, don't work too hard, everybody is famous for 15 minutes"... Now the Baby Boom generation is entrenched in education and government. They are the leaders of the world and have no cornerstone or foundation other than self indulgence. They build nothing, complain about everything, emote. They will sacrifice people towns/counties/industries for a spotted owl or snail and they view themselves superior to the generation that preceded them because they have more degrees in psychology and sociology. They value image over substance and demand to be subsidized. They claim to care but can neither recognize a problem or solve such. They will borrow and enslave themselves to give the appearance of success. They will borrow to enslave future generations for their own self indulgence and comfort. They live in a false reality in which kicking a problem down the road is an art form. They engage in the "morality of me" but want to suffer none of the consequences of their actions. A loss equates to victim hood.

It appears i agree with Rand on your point. Who knew?:joecool:

I think that another difference - perhaps the most important difference - is previous' generations' belief in God or a Supreme Being as the ordering point for their world even if, theologically, their specific beliefs within their culture differed quite a lot.

With our generation (I'm a young boomer), the prevailing spiritual mindset seems to be of self and self actualization - a morality of me, as you put it. I think you described a "me" centered culture quite well. I would only add that self centered people generally have difficulty in developing and maintaining authentic relationships and I think this is reflected throughout our culture with the most obvious and easy to see example being our political leadership's inability to relate to and work with one another on common goals.

[tegator80]

Not much insight, but just passing it on:

http://hosted.ap.org/dynamic/stories/U/US_BUDGET_BATTLE_ANALYSIS?SITE=VANOV&SECTION=HOME&TEMPLATE=DEFAULT

[rajinGator]

T3, props to you. Your posts on this page are extremely well articulated.

[madgator]

There is a dark side to "the greatest generation" as well.


in many ways they were/are the ultimate "me" generation. they had no trouble demanding the benefits of WWII service where many came out completely debt free and educated with a business environment that promoted the possibility for growth.

then they had no trouble sending their childrens generation off to a meaningless war being that so many of them were able to profit.

they then had no issues creating regulations that didn't exist and allowed them to thrive. as they had to protect themselves from competition.

and I'd love to know when their altruism towards country ceased as they have offered nothing of theirs to protect the future. They have done nothing but demand protection of the status quo now for the last 40 years.


sure "the greatest generation" did a lot but they certainly made sure they protected their interests in the process.