Thursday, October 21, 2010


Housing starts
*Peaks in 2006, hits bottom in 2009 and now in 2010 train has not left station
ALL the talk is about the FED and QE2.QE1 began in March 2009, that coincided with the bottom for stock prices, at some point it will be important to see QE 1 and if even more known as QE2 as abject failures in rejuvinating economic activity in THIS country or solve any deep rooted problems.

ALmost all of the gains can be traced back to a weakening US $, the main goal for FED action has been to reboot paper assets and repair housing market, one out of ain't bad?

How about job creation? What is being stimulated is capital and job creation...OVERSEAS! New plants in worker hires in Viet Nam and India....

And for the $TRILLIONS eased and manufactured out of thin air, the housing market has been barely effected, and sits at or near historic lows and in some cases below levels last seen in March of 2009, yet the stock market parties on....what does that tell us?

Not a damn thing about economy. SMALL INVESTOR money continues to FLEE stocks in favor of bonds or other safe vehicles.....that is why we explored who is buying the market.
NON performing loans have SOARED during this crisis, no amount of QE is going to force banks to take on more risk, especially after they saw what just happened when they did that.
SO if the stock market is cheering the thought of another round of FED QE action.....maybe it would be better served looking back and seeing what it actually got for those $TRILLIONS? not much


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