Where to begin? In my history of learning, reading, trading, analyzing, I have never seen a market more manipulated and completely disconnected not only from the economy, but reality.
We have come to a time in our society where economic data no longer has ANY impact on equities. We witness the week of Feb 7th till today, Feb 16th a release of horrible economic news. Let's go through it shall we?
What we are witnessing is the QE going to corporations through corporate bond buying, in turn we saw the greatest massing of corporate buy backs thus pushing stocks higher and higher. Most companies are trading well over 20x earnings. It's a bubble of idiocy and greed.
The issue is simple, scary, and unavoidable at this point. All of this printing has caused probably the worst inflation in US history. The money printer's solution is raising rates, tapering, and shrinking balance sheet, which will prick this equities bubble. The response to a bear market will be.... guess what? More QE, slashing rates but this time, it'll be game over. The USD will have finally met its end as it's de-pegged as the world reserve currency. It won't matter because as the US is facing its currency crisis, other nations will face their own fiat crisis.
Whatever way you cut it, whatever action they take, there will be hurt and at least a recession plus stock market collapse like we've never seen.
We have come to a time in our society where economic data no longer has ANY impact on equities. We witness the week of Feb 7th till today, Feb 16th a release of horrible economic news. Let's go through it shall we?
- Worse Than Expected CPI
- Far Worse Than Expected Consumer Sentiment.
- Worse Than Expected PPI
- Q1 GDP Estimates Now 0.1% or Contraction
- 7 in 10 Americans Live Paycheck to Paycheck
- Home Builder Confidence Falls
- Personal Credit/Debt New Records
What we are witnessing is the QE going to corporations through corporate bond buying, in turn we saw the greatest massing of corporate buy backs thus pushing stocks higher and higher. Most companies are trading well over 20x earnings. It's a bubble of idiocy and greed.
The issue is simple, scary, and unavoidable at this point. All of this printing has caused probably the worst inflation in US history. The money printer's solution is raising rates, tapering, and shrinking balance sheet, which will prick this equities bubble. The response to a bear market will be.... guess what? More QE, slashing rates but this time, it'll be game over. The USD will have finally met its end as it's de-pegged as the world reserve currency. It won't matter because as the US is facing its currency crisis, other nations will face their own fiat crisis.
Whatever way you cut it, whatever action they take, there will be hurt and at least a recession plus stock market collapse like we've never seen.
Comment:
Update: Today the Dow is rallying over 700 points due to the worsening crisis in Ukraine and worse than expected PCE Data of 2/25. Bad news is great news for equities apparently. I feel like big money is moving their funds for a major event or stock market move very soon.
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It seems like no matter how good charts get, it is almost impossible to predict movements when the stock market no longer takes account economic data, geopolitical events. The market has become so unpredictable now that the Fed Market Makers and PPT move the markets as they wish. The movements are all fake without base or cause. This market is disconnected from reality altogether. According to a very well educated economist Harry Dent, we may see the Fed push markets to a new ATH before the actual collapse comes.