Why confuse the economy with the stock market?

D

detective

The stock market and the economy are two different animals.
The stock market is basically a casino with bets being placed by various players, mainly institutions, hedge funds, retail... The chips in play are controlled by a large extent by the Fed. They are putting more chips in play. There is more money in the system to buy stocks.

The Fed is artificially propping up the price of mortgage debt which artificially inflates asset values for banks and institutions who are holding MBS. This allows banks/institutions to value their assets artificially high with help from the Fed. This gives them more gun powder to buy risky assets like commodities and stocks. That is what is happening. This is not trickling down to the economy yet. When it does, everyone will get bullish and that's when the chair gets pulled out.

The fundamentals of the economy are still impaired, but the stock market is no longer impaired. The stock market will keep climbing this wall of worry until more shoes drop and the trickle down effect fades away. This will take several months. Until then, the shorts will continue to be frustrated with this market.
 
Read this thread... you should find it interesting:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=165754

GCSICLRBC had a great post:

Just like Jim Rogers says "The stock market goes up 20%, USD goes down 20%...IT'S A WASH!" Investors haven't actually gained a thing.

But perception is reality.

I like the stock market & oil & comm. to go higher only because of the weaker dollar.

ALL YOU 'GREEN SHOOTS' imbeciles: I'll believe we have a recovery when the STOCK market goes UP *WITHOUT* the USD Falling.

When I see stocks rallying off a weak dollar I smell bullsh*t.

I'll say again I think stocks are going higher (maybe to 1,100 to fill the gap on ES-M9 WEEKLY CHART)...but it'll be due to inflation, weaker dollar, comm. dragging it higher & pure chart strength...

NOT due to 'green shoots,' or America's acceptance of our DOWNWARD SPIRAL INTO MARXIST HELL.


--H

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The Jim Rogers quote stands out!
 
On a more optimistic side (which I am not bullish) and reference to your economic view, the stock market is a leading indicator whereas economic indicators are generally laggards.

Just throwing it out there.... But with the Dollar weakness, it seems pretty irrelevant.
 
The green shoots is a bunch of sell side BS from CNBC and the business networks to try to pump the market.

I agree, inflation is driving this rally, or to put it more bluntly, blatant money printing. That is why oil and gold are going up right along with stocks, if not more than stocks. The banks get the money first for any money printing operation by the Fed. So that's why the financial markets are rocketing while Joe Blow is getting fired. The Fed is trying to blow another asset bubble to cure a bursting of an asset bubble. Bubbles to cure bubbles. It will just lead to rampant inflation down the line.
 
Ever since the Federal Reserve was created, their responsbilities have continued to grow exponentially. When Greenspan was able to limit the crash of '87 by promising to provide liquidity to the whoever needed it, he also created an idea in investors minds that he would never let the markets drop like that ever again. Since then the Fed has attempted to create a firewall between the real economy and the stock market. As we have seen this firewall has become increasingly more difficult to preserve. Eventually, the problems will become too large for the Fed to handle and the markets, the economy, and the US will all end up in ashes....Good luck out there....
 
Quote from monty21:

Just like Jim Rogers says "The stock market goes up 20%, USD goes down 20%...IT'S A WASH!" Investors haven't actually gained a thing.
More...

They have if they live in Canada, own stocks in USD, and have all of their cash in CAD. :p
 
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