Tuesday, April 26, 2011


With new rally highs in most of the indexes, it is likely that the current bull mkt has further to go....todays UP volume was only 66% of total volume but volume has not been a problem for the rally since 2009.....this is the fastest rising bull mkt perhaps in history...and it has erased about ALL of the losses from the financial crisis had investors stayed put.

None of this would have happened with an almost $2 Trillion gain in the FED balance sheet, and a US $ that is close to its all time lows. Interest rates have also fallen during the most recent leg up in stocks.....even as the US had its debt downgraded!

If you are asking me to make perfect sense of all of this, I wont be able to do that from a fundamental standpoint. It does show what the FED can accomplish when it throws its weight and influence behind the stock market.

You may ask how are companies showing huge profits with so many still unemployed? costs are down, profits in INFLATED $'s look much better than they actually are especially for companies doing a lot of business overseas....that's right, more incentive NOT to expand here.

The rally has occurred with a housing market that has showed NO signs of improving, inflation in food and energy, consumer sentiment at Recession lows in Gallup and ABC, and well below 911 lows in other...like Michigan Sentiment....none of that seems to matter.

You STILL have ZIRP FED policy, and the WORST place to be is where many find themselves...IN CASH!  AND so we are told the world economies are on mend, corporate profits are rising.....and there is not a damn thing to worry about as even former HARSH CRITICS don't see a repeat of 2008 possible.

On the surface, the US is the place to be? THIS ALL KEEPS GOING MORE THAN LIKELY until the FED changes their current stauts quo....and NO ONE thinks they might ever do that...even 3 years into a RECOVERY...such as it is, with stocks regaining in some case ALL OF THE LOSSES......we are to be told that they cannot change course now and not for as far as the eye can see because???? of a still fragile recovery??????

In this case I will recover an over used phrase...."and pigs get slaughtered.."  This goes for investors who get TOO GREEDY and this may also hold true for A FED who keeps rates at ZERO and keeps pumping the primer for STOCKS in hopes of a REAL RECOVERY TAKING HOLD....and stay TOO LONG and create a truely hideous monster when pops....will bring true torture as if we havent already been through it.

It's time for the FED to come OFF the zero interest rate monetizing debt game or COME CLEAN on the real shape of the US economy...


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