Hard to believe? When hasn't FED action led to higher stock prices eventually? But the manipulation and intervention cannot last forever. This artificial sweetner has given illusion of economic prosperity of which doesn't exist in this country, to those we've exported jobs, sure.....we're also exporting inflation to places like China....take note Chinese stock market rally has stalled and looks NOTHING like that of the other major markets like US....even though they are engine of growth? how whacky is that?
I'm still looking for some kind of January comeupins, as bullishness is off charts and is at or near other previous major tops, but that doesn't mean this rally will end with correction, but 3-5% would be normal....beyond that we would have to asess.....I am in minority even suggesting a decline is possible....with all this new years cheer.
Friday will bring jobs report, traders are angling for a bullish one, most suggesting 150,000 jobs added......let's not argue and say sure, it would take 6 years to gain back the 8 MILLION jobs lost....since many were manufacturing, what chance is there?...there are jobs, but you better be the best of the best......so many 6 figure jobs of bygone era are replaced with whatever you can get.
We are building a Sovereign Debt BUBBLE, that may be next to or is in process of bursting. The US can never pay its debt back, at best hope to pay the interest which is mostly in SHORT TERM TREASURIES even as we experience historical LOW long term rates.....should these move up could derail the whole system.....data misleads inflation experience.
Crude is at $92, and is forcing up gasoline prices, like a tax on Consumers....the AVG JOE has seen little or no wage appreciation in years to help cope with rising prices.
ODDLY? state property tax asessments are now coming in with HIGHER property values even in face of 3 year contraction in HOME VALUES! States cannot allow a lowering of already weak tax reciepts...and there is no chance of winning an appeal.
New Congress, optimism is in the air, none of the fear present during crisis can be found.....a ONE SIDED "experts" poll have 2011 a very bullish year, none of the experts expect much fuss in 2011......FED GOT YOUR BACK.
FED holding HISTORIC funds rate at 0%, providing BANKS (who can use money for stocks) a FREE source of funds to speculate.....PROP up stocks.....small caps have led gains showing animal spirits. 50% of gains for 2010 came in December.....banks BONUSES will be ROBUST....BANKS do not have to take mark downs on mortgages as rule mark to market still suspended....that was game changer.
Markets can and do rally in the poorest of times, that is when you find the MOST CYNICAL of investors........the smile has been wiped clean off the bears faces, their fur stripped off....and we end up with a most one sided bullish opinion......how's that make you feel?
D
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