Stock Market is plummetting... "The Market Is Rapidly Realizing That They Can't Go On Forever"

Discussion in 'Too Hot for Swamp Gas' started by mocgator, Jan 24, 2014.

  1. mocgator
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    mocgator Well-Known Member

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    Maybe some more cracks in the armor are starting to show....

    US stocks slammed; Dow falls 300-plus points in worst week since 2011

    http://www.cnbc.com/id/101361746



    Santelli Slams Central Bank Policies: "The Market Is Rapidly Realizing That They Can't Go On Forever"

    http://www.zerohedge.com/news/2014-...market-rapidly-realizing-they-cant-go-forever


    "For a while," Santelli calmly explains, the fairy-dust commercial planners (Central banks) "at least for a while, made everything seem like it could work." However, with "no excess margin in the system," emerging-market-cannonball-driven ripples in the global pool of liquidity are a major problem. Slamming those who argue 'taper is small' or 'Argentina doesn't matter'; the ever-increasing central-bank-inspired interconnectedness means "the market is realizing in a hurry," as we have warned numerous times, "these [central bank] programs can't go on forever,"
    Add to this, Santelli notes, that even the central bank architects of the (faux market) buildings (e.g. BoE's Carney) no longer want to live in these buildings... and problems lie ahead...
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  2. mdgator05
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    mdgator05 Premium Member

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    Wow it only take one bad week to bring out MOC I guess.

    Frankly, with the current deflationary pressures on developed economies, there is relatively little reason to pull back on aggressive monetary policy. An aggressive monetary policy really only has problems if inflation shoots up due to the expansion of the amount of money. Has that happened?

    [​IMG]

    So that's a no. If the fed is screwing anything up, it is in the discussion of tapering when there is no inflation issue. If we see a few months of annualized rates well above 2%, then we should consider becoming less aggressive with monetary policy. However, we are yet to see that. Until we do, why become less aggressive?
  3. RealGatorFan
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    RealGatorFan Well-Known Member

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    This is what happens when your government manipulates the markets. They made junkies of Wall Street and they are showing withdrawal symptoms as their fix is removed. This will never go away. We still have to look at nearly $20 Trillion in debt by 2020. The interest payments on that baby are going to be huge.
  4. asuragator
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    asuragator Well-Known Member

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    A few weeks ago, it was the stock market didn't matter.
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  5. RealGatorFan
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    RealGatorFan Well-Known Member

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    That CPI has been debunked so many times, even Obama has stopped talking about it. You add back real products and inflation is almost at 10%.
  6. exiledgator
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    exiledgator Gruntled Premium Member

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    LOL. I hear those guys at work. Narry a peep as the market climbed 8000 points, but every dip of 200 and it's how those commies are stealing their retirement.
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  7. mdgator05
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    mdgator05 Premium Member

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    These are real products. You have core CPI and total CPI. Core is 1.5 while the headline is about 1.7. Headline includes energy and food, which are more volatile. These are based on purchasing a constant bundle of "real products." I have no idea where you are coming up with 10%, but I would love to see it if you have a link.
  8. mastoidbone
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    mastoidbone VIP Member

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    Why taper??
    Guess what happens to ALL THOSE bonds the fed bought at ultra low rates when the rates go up?
    You get a FED with MASSIVE losses.

    Also---since there is MASSIVE deposits on hand in the banks--since there is no NO evidence of liquidity being a constraint on the economy---what exactly is the purpose of QE? What is the mechanism of ite benefit?

    Recall---interest rates and mortgages are higher TODAY then when QE started----great job fed!!!!

    QE is a USEFUL tool when it meets a KNOWN constraint on the economy----but that condition does not exist. All the FED has done is make it VERY uncomfortable for people to hold low risk assets---so that drove valuations up above what would be expected for the return---in other words---a FED bubble.

    Enjoy.
  9. gatorman_07732
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    gatorman_07732 Well-Known Member

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    I think that what some have eluded is that the stock market was not been reflecting the economy but rather the fed pumping and interest rates being kept low.
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  10. asuragator
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    asuragator Well-Known Member

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    Perhaps so, but I've seen on here over the last few years the simplified, it doesn't matter (presumably b/c it might make Obama "look good")
    Last edited: Jan 24, 2014
  11. mdgator05
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    mdgator05 Premium Member

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    Corporate profits are up by a lot more than can be explained by interest rates being historically low.
  12. HallGator
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    HallGator Administrator VIP Member

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    If you keep making predictions about the market long enough most anyone is going to eventually get it right.
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  13. gatorman_07732
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    gatorman_07732 Well-Known Member

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    Your correct but they're not hiring like they should, so again the market is not reacting because we are in a great economy. No matter how you want to slice it the economy is not great only adequate. Wall Street lives the pump and the low interest rates. If one of those two change then it will become a Bear market. This particular selloff had nothing to do with either and more to do with fears of China's economy which is a damn shame.
    Last edited: Jan 24, 2014
  14. asuragator
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    asuragator Well-Known Member

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    A contrapositive of the stopped clock theory :)
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  15. Minister_of_Information
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    Minister_of_Information I'm your huckleberry Premium Member

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    The party out of power always has an appetite for the bearish case. But the economy is a self healing mechanism, whether humans intervene successfully or unsuccessfully, and it can't stay in the crapper forever.
  16. VAg8r1
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    VAg8r1 Well-Known Member

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    This could be a buy signal. If I recall the last time moc had a similar post, the DOW is somewhere around 10,000.
  17. oragator1
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    oragator1 Premium Member

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    The market is up over 100% in this run, of course there will be a pullback. That in itself doesn't signal anything more than basic economic common sense.
    The reasons for the pullback today were China and other emerging markets, not the Fed. But once the selling started everyone began to wonder whether this was the long awaited pullback and some panic crept in.
    After everyone has had a chance to digest the last couple of days over the weekend, Monday will be a good baromoter. This might be the correction we will see, but getting worked up over one or two days, good or bad speaks to someone hoping to see something and not much more.
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  18. JerseyGator01
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    JerseyGator01 Well-Known Member

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    Wall street can only live off of the government for so long.
  19. Gatorrick22
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    Gatorrick22 Well-Known Member

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    Yep, and I don't think about your car payments until your car breaks down. The whole stock market is being funded by the Fed's free money... When the payments (free money) runs out you start to think about that too.
    Last edited: Jan 25, 2014
  20. rivergator
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    rivergator Well-Known Member

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    The stock market has done very well over the last few years, for whatever the reason. I'm not sure that one bad week is really enough to start panicking. "OMG, it's over! We're doomed!!!"
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