WE'RE DUMB BUT NOT STUPID

How does nitwit AJC still get face time on CNBC??



Futures contracts show LARGE bullish bias with LOW VIX contracts.



Market and $ have broken connection. LOTS of implausable good news priced into market. The SPX yield is under 2%....never seen before at market lows. 3% yield typical top (as in 2000)



3% was 2003 bottom argued that wasn't bear bottom and so it wasnt with 2008-2009 lows breaking old bear lows.....2007 highs showed 3% yield then 2% range at MArch bottom....door is OPEN to test or new lows down the road.



ADJ rate mortgages peak reset 2010-2011. COmmercial loans deliquent and defaulting still rising.



COnsumers do not have large home equity to draw upon. 10-20% unemployed and underemployed and plum gave up not going to consume as before.



FED has bought huge share of GOV debt to manipulate rates down plus buyer of last resort. Rates appear to have bottomed and are on the rise.



FED controls only short end, the more the gap between short and long rates the LESS LIKELY BANKS ARE TO LOAN......add that to already dampened demand and you don't get V recovery at BEST you get hard slog to mediocrity.



One of the best tools for economic vitality is VELOCITY OF MONEY and it almost always precedes a SPX rally and recovery, economic expansion. IN 2003 it lagged a bit but late 2002 showed it leveling off at least, mid 2003-2008 it rose sharply.



NOW VELOCITY is still in SHARP DECLINE and this tells me to this point in time, the money in economy is not changing hands rapidly which would cause expansion.



As I said, the excess reserves in banking system are HUGE, monolithic.....but it has not as yet been making its way into main street to goose economy, induce hiring etc.....FED policy of paying on these excess reserves as well as 0% rates and that carry trade of borrow short buy long will remain until banks have more than a "PLEASE LEND" from Obama as incentive....they have LITTLE reason to do anything different.



ALSO, what you see as profits as they report, perhaps they know that marking paper to market value at present may signal insolvency.



A game is being played, American public is being gamed. SO ABBEY, good old disgraced interent jerk is calling for 2010 1250-1300 SPX, take it to the bank.......?



Duratek