New Highs in averages were made by squeezing shorts out of a few stocks where short sellers were sitting on some profit. As long as what is left of traders, hedge funds and others short stocks and place stops, friends of the fed are happy to accept the gift. It is a broken record. The friends of the fed know where all of the stops are and they know how to run them. All is needed is the right day and the marching orders. Lets be clear. The averages are making new highs because of affirmative action. In the mean time the economy is being destroyed. Believe the writing on the wall or wait 40+ years when the truth comes out and read the history.
While waiting for something in the mechanism to fail, there is still a huge supply of stock hanging over the market that is noteworthy. Most analysts have given up on looking at breadth indicators. The chart at the top of the page shows the huge divergence between averages and the percentage of stocks above their 200 day moving averages. A chart like this is not good for trading but it does represent a guarantee that all of this excess value in the market will come out of it. The problem with using this kind of statistic as an indicator is that any weakness draws in organized support. That won’t stop with out an accident or unless coercion is used to make it stop. Central banks unless seriously reined in are going to use up the worlds resources buying stock to keep the market from falling. Are central bank economists willing to destroy every economy in the world to prevent markets from clearing? You bet they are!
The chart below is a picture of the theft of interest on Grannies savings. The stock market cannot be elevated artificially without taking form Grannie and giving to Goldman Sachs. Does Grannie mind? Grannie is a patriot and probably thinks she is doing it for her country.
Stimulus is talked about as if it started in 2008. Actually it began most seriously in the Reagan Administration following the Full Employment Act of 1978. Stimulus gives new meaning to easy money. Look at the Dow stocks and pick out the ones making new highs. Then look at how much each spends in campaign contributions. They are all of the kind which literally buy their profits politically.
The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.
Fantasy Free Economics recommends the following blogs.
Of Two Minds Liberty Blitzkrieg Mises Institute Straight Line Logic Paul Craig Roberts