While waiting for something in the mechanism to fail, there is still a huge supply of stock hanging over the market that is noteworthy. Most analysts have given up on looking at breadth indicators. The chart at the top of the page shows the huge divergence between averages and the percentage of stocks above their 200 day moving averages. A chart like this is not good for trading but it does represent a guarantee that all of this excess value in the market will come out of it. The problem with using this kind of statistic as an indicator is that any weakness draws in organized support. That won’t stop with out an accident or unless coercion is used to make it stop. Central banks unless seriously reined in are going to use up the worlds resources buying stock to keep the market from falling. Are central bank economists willing to destroy every economy in the world to prevent markets from clearing? You bet they are!
The chart below is a picture of the theft of interest on Grannies savings. The stock market cannot be elevated artificially without taking form Grannie and giving to Goldman Sachs. Does Grannie mind? Grannie is a patriot and probably thinks she is doing it for her country.
Stimulus is talked about as if it started in 2008. Actually it began most seriously in the Reagan Administration following the Full Employment Act of 1978. Stimulus gives new meaning to easy money. Look at the Dow stocks and pick out the ones making new highs. Then look at how much each spends in campaign contributions. They are all of the kind which literally buy their profits politically.
The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.
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