More Economic GOOD NEWS: Stocks log strongest 1st Quarter in 12 years

[rightwinger]

This is due primarily to the Federal Reserve, which has taken absolutely unprecedented steps to support the housing market. It has created enormous amounts of liquidity - literally nearly $2 trillion - to support the housing and mortgage markets. This ocean of liquidity is now gushing into asset markets such as stocks and bonds. These are the same conditions that created the housing bubble, and the people who run the Federal Reserve are absolutely clueless in the roll they play in creating bubbles all around the world.

The other thing that is gunning stock markets is China. China jammed $500 billion into its financial system over the past year, literally forcing banks to lend to projects that will ultimately prove to be unprofitable. This is supporting industrial, manufacturing, materials and energy companies as China builds factories and buildings it does not need.

The economy is getting better, but stocks are now expensive, and this is now a momentum-chasing market.

This will go on for awhile, perhaps 2 or 3 years. But when it ends, there is a very high risk that we will eventually crash down and re-test the lows.

The amazing thing to me is that we have not learned a thing from the housing bubble. The people who run monetary policy in this country are incompetent. When the next bubble collapses, we may not have enough stimulus to support anything, and we will be SOL.

Wouldn't the fact that investors are borrowing and then putting their money into stocks be the fault of the investors and not the Fed? Just saying.

And isn't the bubble effect going to tempered by all the new financial regulations that are going into place?

The Government put $800 billion into the economy and the market increased by $6 trillion

It is obvious the increase was due to "government interference"

 

[Vast LWC]

Wasn't there a recent complete lack of liquidity that needed to be rectified anyway?

Also, it seems to be that raising the capital gains tax would be an excellent way to counteract the effect Toro described, and decrease the deficit at the same time.

 

[Toro]

Wouldn't the fact that investors are borrowing and then putting their money into stocks be the fault of the investors and not the Fed? Just saying.

And isn't the bubble effect going to tempered by all the new financial regulations that are going into place?

The new regulations will not stop the next bubble. They may mitigate it, but they can't prevent it.

The Federal Reserve is acting in a manner it knows will cause investor behavior. If you are a pension fund that needs to generate a return of 7%-8% return because you must earn that by law to earn your actuarial return, otherwise you are eventually bankrupt because you have promised your employees a certain income when they retire, when interest rates collapse, the pension fund has to buy riskier assets to earn a higher return. This causes the pension fund to buy riskier corporate bonds, stocks, real estate, etc.

Also, when the Fed buys mortgages, it takes them off the books of banks and Wall Street firms and replaces them with cash. Cash earns nothing, so there is an asset-liability mismatch for the bank, meaning the returns on assets it earns is now lower than the liabilities it must pay interest on. To rebalance this mismatch, banks must buy risky assets to earn a higher return, otherwise it risks its bottom line, and perhaps the bank itself.

This is a Fed-induced rally. Stocks are probably going much higher over the next few years, but when the liquidity begins to be withdrawn and interest rates start rising significantly on the short-end, the market will be extremely vulnerable.

Liberals and Democrats shouldn't be pumping their chests about this because I believe it will almost certainly come back to haunt them.

 

[eagleseven]

After all...Zander has been assuring us

THE ECONOMY WILL FAIL

The future of the Republican Party depends on it

Republicans have experience inflating bubbles...so they're getting better at spotting them.

The Democrats still believe manipulating macroeconomic indicators causes real economic growth. Funny how the Dems are obsessed with environmental sustainability, when they cannot even manage economic sustainability.

 

[Zander]

Buy stocks!! Buy now!! You can't lose!!!

I agree with Toro. This is yet another bubble caused by govt interference in the marketplace. If you have any stock positions my advice is to sell now while the prices are inflated. Good luck!

After all...Zander has been assuring us

THE ECONOMY WILL FAIL

The future of the Republican Party depends on it

Will Fail? It already has. Here is a picture of our economy:

The "house" has already burned to the ground. The economy has failed. We have cleaned up the site a little - but nothing has changed fundamentally. Millions of property owners are still underwater and owe more than their homes are worth, housing, manufacturing, service, health care, technology, energy, financial, hospitality, construction, just about every sector of the US Economy (except Government!) is worse off now than it was in 2008. Sorry, the facts are the facts. The Fed is creating another bubble and you have to be blind not to see it. I want the economy to recover - when it does I will be the first to cheer.


PS- the stock market is not the economy.

 

[Vast LWC]

I went short a little over a week ago but I'm beginning to wonder.

Stocks don't go down much when the yield curve is so steep and the economy is beginning to grow again. They also probably don't go down much when ~$2,000,000,000,000 worth of liquidity has been pumped into the asset markets by the Fed's buying of mortgages and other assets.

The more the market goes up, the more I worry about the future of the dollar, and the higher the probability of $5000 gold becomes.

Though, if the dollar goes down, it does add to our competitive edge in trade.

 

[Vast LWC]

Buy stocks!! Buy now!! You can't lose!!!

I agree with Toro. This is yet another bubble caused by govt interference in the marketplace. If you have any stock positions my advice is to sell now while the prices are inflated. Good luck!

After all...Zander has been assuring us

THE ECONOMY WILL FAIL

The future of the Republican Party depends on it

Will Fail? It already has. Here is a picture of our economy:

The "house" has already burned to the ground. The economy has failed. We have cleaned up the site a little - but nothing has changed fundamentally. Millions of property owners are still underwater and owe more than their homes are worth, housing, manufacturing, service, health care, technology, energy, financial, hospitality, construction, just about every sector of the US Economy (except Government!) is worse off now than it was in 2008. Sorry, the facts are the facts. The Fed is creating another bubble and you have to be blind not to see it. I want the economy to recover - when it does I will be the first to cheer.


PS- the stock market is not the economy.

However, just about every sector of the economy is better than it was in 2009.

That's known as a recession and recovery.

 

[Zander]

This is due primarily to the Federal Reserve, which has taken absolutely unprecedented steps to support the housing market. It has created enormous amounts of liquidity - literally nearly $2 trillion - to support the housing and mortgage markets. This ocean of liquidity is now gushing into asset markets such as stocks and bonds. These are the same conditions that created the housing bubble, and the people who run the Federal Reserve are absolutely clueless in the roll they play in creating bubbles all around the world.

The other thing that is gunning stock markets is China. China jammed $500 billion into its financial system over the past year, literally forcing banks to lend to projects that will ultimately prove to be unprofitable. This is supporting industrial, manufacturing, materials and energy companies as China builds factories and buildings it does not need.

The economy is getting better, but stocks are now expensive, and this is now a momentum-chasing market.

This will go on for awhile, perhaps 2 or 3 years. But when it ends, there is a very high risk that we will eventually crash down and re-test the lows.

The amazing thing to me is that we have not learned a thing from the housing bubble. The people who run monetary policy in this country are incompetent. When the next bubble collapses, we may not have enough stimulus to support anything, and we will be SOL.

Wouldn't the fact that investors are borrowing and then putting their money into stocks be the fault of the investors and not the Fed? Just saying.

And isn't the bubble effect going to tempered by all the new financial regulations that are going into place?

The Government put $800 billion into the economy and the market increased by $6 trillion

It is obvious the increase was due to "government interference"

You can't be that stupid? Do you even know what a fractional banking system is?

 

[Toro]

I went short a little over a week ago but I'm beginning to wonder.

Stocks don't go down much when the yield curve is so steep and the economy is beginning to grow again. They also probably don't go down much when ~$2,000,000,000,000 worth of liquidity has been pumped into the asset markets by the Fed's buying of mortgages and other assets.

The more the market goes up, the more I worry about the future of the dollar, and the higher the probability of $5000 gold becomes.

Though, if the dollar goes down, it does add to our competitive edge in trade.

I'm not talking about the dollar going down. I'm talking about what we will need to do for the 2015-2016 Great Recession, or whenever that is going to be.

We need more and more monetary and fiscal stimulus to move the needle less and less. The amount of stimulus we have needed to get the economy moving over the past recessions have been greater than before, and the rebound after each recession has become weaker and weaker. At some point, this relationship cannot continue without seriously threatening the foundation of the dollar.

 

[CrusaderFrank]

Bush was right after all, we should have partially privatized Social Security years ago

 

[eagleseven]

Though, if the dollar goes down, it does add to our competitive edge in trade.

So we can sell China all the merchandise we can no longer afford?

 

[driveby]

Stocks log strongest 1st quarter in 12 years - USATODAY.com

Don't be lulled by the lazy calm that has settled over Wall Street the past several weeks. The stock market is on a roll.
Stocks are coming off their best first-quarter performance in a dozen years, up 4.9% year-to-date, says Standard & Poor's. It's the fourth consecutive up quarter, the market's best streak since the five-quarter run that ended after the third quarter of 2007, based on the broad Wilshire 5000 index.

The quarter's gains might not seem like much considering the jumps during the past three quarters as stocks roared back from bear market lows. Remember, though, that halfway through this quarter the market was on the verge of its first correction, or drop of 10%, since the bull market began.

The market's strong performance during the first quarter has some investors believing the momentum can last, especially since the first quarter historically hasn't been one of the market's best.

Coupled with the great housing news you suddenly stopped reporting, the economy is booming thanks to the brilliant decisions made by this administration ! ........

 

[rightwinger]

Stocks log strongest 1st quarter in 12 years - USATODAY.com

Don't be lulled by the lazy calm that has settled over Wall Street the past several weeks. The stock market is on a roll.
Stocks are coming off their best first-quarter performance in a dozen years, up 4.9% year-to-date, says Standard & Poor's. It's the fourth consecutive up quarter, the market's best streak since the five-quarter run that ended after the third quarter of 2007, based on the broad Wilshire 5000 index.

The quarter's gains might not seem like much considering the jumps during the past three quarters as stocks roared back from bear market lows. Remember, though, that halfway through this quarter the market was on the verge of its first correction, or drop of 10%, since the bull market began.

The market's strong performance during the first quarter has some investors believing the momentum can last, especially since the first quarter historically hasn't been one of the market's best.

Coupled with the great housing news you suddenly stopped reporting, the economy is booming thanks to the brilliant decisions made by this administration ! ........

stay tuned...more to come in the next few days


I'm expecting.......MORE ECONOMIC GOOD NEWS

 

[concept]

But I thought the great and wonderful Ozbama said we shouldn't pay attention to the daily girations of the dow?

Or is it ok to do so now?

So just so I get this straight....

Dow going down? No biggie, don't pay it no nevermind.
Dow going up? ZOMG Ozbama's economy is teh roxorz!!!!!

Tell you what, you give me your choice of major economic indicator, and I'll show you how it's improved.

And, by the way, the government is making 7.2 Billion dollars off of their investment in Citibank by selling it's shares.

Now, while Bush was the guy who decided to bail Citi, among other banks, out, the Democrats were the folks that insisted the loans be turned into buying of shares.

Turns out that that little bit of "Socialism" turned quite a nice profit for the taxpayers.

Oh no, I'm very sorry. Don't deflect from the fact that Barry himself said not to take the dow seriously.

 

[driveby]

Stocks log strongest 1st quarter in 12 years - USATODAY.com

Don't be lulled by the lazy calm that has settled over Wall Street the past several weeks. The stock market is on a roll.
Stocks are coming off their best first-quarter performance in a dozen years, up 4.9% year-to-date, says Standard & Poor's. It's the fourth consecutive up quarter, the market's best streak since the five-quarter run that ended after the third quarter of 2007, based on the broad Wilshire 5000 index.

The quarter's gains might not seem like much considering the jumps during the past three quarters as stocks roared back from bear market lows. Remember, though, that halfway through this quarter the market was on the verge of its first correction, or drop of 10%, since the bull market began.

The market's strong performance during the first quarter has some investors believing the momentum can last, especially since the first quarter historically hasn't been one of the market's best.

Coupled with the great housing news you suddenly stopped reporting, the economy is booming thanks to the brilliant decisions made by this administration ! ........

stay tuned...more to come in the next few days


I'm expecting.......MORE ECONOMIC GOOD NEWS

MORE ECONOMIC SPIN ...........

 

[boedicca]

It's a bubble.

Interest rates are near Zero for savings and money market accounts. Many seniors who would normally put money into CDs and use the interest to supplement their retirement income, are now taking more risks because they are earning nothing on CDs.

Money seeks assets - as the money markets are ruined for the retail investor, their money is going to stocks. We'll probably have a decent market until near the end of this year when massive amounts will be cashed out to avoid the 2011 expiration of the Bush tax cuts.

 

[Zander]

Underemployment is up 2o%....good news?
Underemployment Rises to 20.3% in March

 

[Zander]

More good news? Verizon Sees $970 Million Cost From Health-Care Law (Update2) - Bloomberg.com

 

[Zander]

More good news?
California's last auto plant shuts its doors

 

[Zander]

More good news?
Oil was at $30 a year ago....Oil settles near $85, higher fuel costs ahead - Yahoo! Finance