Tuesday, September 29, 2009

DOWN THE SINKHOLE

FROM POSTER COMMENT ON ZERO HEDGE BLOG LINK HERE

Here is excerpt mainly to help you find it, it will take a moment of work but worth it, just scroll down to comment # shown here:

by London Banker on Tue, 09/29/2009 - 01:18#82175

"I posted this over at Roubini's blog, but think it probably belongs here too - especially as it represents a nice neat conspiracy theory.
@ HayesGood to see you. I'm still not able to post a blog, but can't resist hanging with the blog buddies here in the comments.

Clearly a great deal of the easy money from QE in US, UK and EU has ended up in speculative momentum in asset markets (equities, commodities, bonds) as a new carry trade. Virtually none of it has gone to financing productive investment or increased retail/commercial lending that would promote consumption/growth in the real economy. The result is a bubble in asset prices blown up by the easy money, with no realistic basis in actual consumer, business or economic fundamentals. As a result, it is clearly unsustainable. When it will burst is anyone's guess.
I think it's a pre-meditated set up that will be burst to achieve a political agenda - just as with the Lehman failure/Reichstag Fire for the Paulson Plan looting. And I think the Fed and PBs are positioning things now to burst the bubble soon - if only to forestall the Audit the Fed Bill. "

D

2 comments:

Anonymous said...

Bubble assets for sure. When the government is handing out money to banks and brokerage houses they will put that money where it will return the most. For banks lending that money out (which is what they used to be in business for) is not a very good option; so the money goes into equities, futures and commodities. Thanks to the politicians who repealed the Glass-Stegall Act, commercial banks and now investment banks.

However, to make a profit in financial assets, they need to be sold and the profit booked.

Now comes the greater fool theory.
Once the lemmings are brainwashed to think all is well and the transfer of paper from the banks and brokerage houses to the greater fools is complete then look out below.

Based on the low volume, this is obviously a tough sell and not working like the past. So it may be a bad news shocker that sends the market down heavy vs your typical distribution from strong hands to weak hands.

Either way, it is actually fun sitting back with my popcorn and watching this one play out.

D said...

Hard to restart economy if the money doesn't get to where it can produce. Far too long greed short investment. Light on the butter I hope