What will break this uptrend?

they put in too much, they maybe should have doled it out slower ,given it more time,,given it to smaller businesses,jumpstart the jobs, then the recovery may have been plausible,banks getting rich and everyone else little to no improvement,the banks and ben are the only ones believing it's helpful, they need to get out and have a look around,pumping steroids into cnbc news blips isn't working
 
Quote from olias:

I agree, it's not working out too well. Do you suppose that is because the whole method is ineffective, or because they didn't use enough money?
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Neither and both. The problem is a little more complex and there is no way of knowing what would've happened without QE. I think we would have had real deflation which would have sucked for a while, however the system would have been purged of non-capitalistic incentives. Assuming that there is no catastrophe any time in the next 5 years I think we can consider QE "succesful" in the sense that it did not make matters worse.

I'm not a big fan of monetary policy in general because it is executed by people and people have agendas and (political) biases. The idea is that Central Bankers do not suffer from that but who really believes that? I think these policies are generally pro-cyclical. The idea is to be anti-cyclical by having tight money in upswings and loose money in downswings. However in 2005-2007, money should have been tighter. I think if fiscal and monetary policy had been tight then the whole crisis could have been avoided (no way those mortgage salesmen would have been as gung-ho to sign up deadbeats for $0 down mortages) and now we are headed straight for a new one because, again, the FED refuses to abandon the loose money policy until we are at DJ 25,000 or something. In hindsight, I think the idea shall also be that "in 2010-20?? money should have been tighter".

If we have two monetarily and fiscally tight quarters and the shit does not hit the fan, dividend yield is at or above 2% and the risk premium is not excessive (such as right now) then I might consider going long.
 
Quote from nutmeg:

Bull markets end on good news.

Got news?
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Very astute observation. This is almost always the case. I'll add also that bull markets tend to end with lots of flare In other words, a blow off top with high volatility. Not this 3 handle grinding shit we have now. If we get a 100 handle rally in a week, rest assured, there is a good chance that will be it.
 
Quote from Locutus:

Lots of places. I bet some went to EM's, commidities, private equity investments, small caps, medium caps, derivative bets, real estate (which is where they really hoped a lot of it would go but didn't obviously) and a bunch of other shit I can't remember.

The FED's QE is also what I've read others call "moderately conservative", which I agree with. The amount of money being printed is not exorbitant, not enough to create anything near hyperinflation and certainly not enough to boost the S&P500 by as much nor to almost triple some commodities.

The whole FED -> BTFD thing is totally a mania. The fun thing about every mania thus far in the history about manias is that in every single one people though that "this time it's different" because "this time the facts are on our side". Of course being on the other side of the mania is also very difficult to make work because timing is almost impossible.

In case you think I'm pessimistic, I'm bullish on treasuries, assuming the US will not default which I also consider a risk. Hyperbullish on corporate credit though (nice returns + much smaller risk of default if you pick some sound companies).
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so you think the rise in commodities is supply and demand related, not speculative?

the pomo money is going into all markets, agreed. but when you have even ben saying that it's nice that it causes the stock market to go up as an added benefit, then you know the fed is backstopping the market.
 
ben gives the money to the banks,the banks trade securities rather than loan it or invest it in US infrastructure,the banks are the clearing houses now,that's what clearing houses do,morgan,gs,...
 
Quote from Tsing Tao:

so you think the rise in commodities is supply and demand related, not speculative?

the pomo money is going into all markets, agreed. but when you have even ben saying that it's nice that it causes the stock market to go up as an added benefit, then you know the fed is backstopping the market.
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Rise in commodities is mostly speculative (as in not fundamental as in it will likely mean revert possibly quite soon but definitely eventually).

Like I said, it's mostly an idea in the speculator's minds that the FED is backstopping the market. There is no such thing as "backstopping the market" in reality because you cannot guarantee the (real) value of something that you cannot control (i.e. the performance of the S&P500 components is not controlled by the FED thus they cannot backstop the market, although they'd like to believe they could).

Anyway, we don't disagree. I agree the markets will continue to go up as long as the people remain in good faith that "the FED is backstopping the market" (whether it is or is not is really beside the point, because even if it really was backstopping the market there is no way it could hold off a real selling frenzy should one occur, or they would have done so in 2008).
 
Quote from Locutus:

Rise in commodities is mostly speculative (as in not fundamental as in it will likely mean revert possibly quite soon but definitely eventually).

Like I said, it's mostly an idea in the speculator's minds that the FED is backstopping the market. There is no such thing as "backstopping the market" in reality because you cannot guarantee the (real) value of something that you cannot control (i.e. the performance of the S&P500 components is not controlled by the FED thus they cannot backstop the market, although they'd like to believe they could).

Anyway, we don't disagree. I agree the markets will continue to go up as long as the people remain in good faith that "the FED is backstopping the market" (whether it is or is not is really beside the point, because even if it really was backstopping the market there is no way it could hold off a real selling frenzy should one occur, or they would have done so in 2008).
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ok, we may not agree on the mechanics of it, but the underlying reason is pretty much the same on both our minds. thats good enough for me.

good trading.
 
If ben died today maybe you would get a sell off.... but people would buy that up as well....




Really good news will kill this rally.... The market looks like its still wants to blow its load....
 
locutus has a point on the real Effect The Fed is having on the market. It is akin to buying a penny stock that just put out insignificant news and sees a buying frenzy which just perpetuates more buying....until it's ova. QE2 is set to end in june, the market should already have this priced in and should have reached that top already. So it might in fact have some real legs under it or it may just be discounting qe3,4,5,6,7...which if thats the case the market should be at 1750 already, the buyers would get in front of that news not behind it....peace
 
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