2016 and the Stock Market of Course

Stunning-Happy-New-Year-2016-Images-Happy-2016-Pictures-7Lies live a long time but they eventually die. The punishment for believing lies is staggering and lethal for many. Debate could go on a long time as to which is the biggest lie of the century.

The notion that in representative government representatives serve constituents can be believed as a lie but that belief can be due to a general lack of awareness. Believing that the Federal Reserve has been tirelessly trying to do good things for the economy is another story.  Anyone with half an educations understands the difference between an independent variable and a dependent variable.  The distance a car can drive is dependent upon how much gas is in the tank. Only a fool would claim that putting a bigger gas tank on a car and filling it with the same amount of gas will cause the car to go farther.

People have believed that if the Federal Reserve pushed up stock prices, the general economy would expand. In the end stock prices are determined by nothing other than the profitability of the underlying corporations. Believing this lie will result in suffering that few can currently fathom.

There has never been a chance that goosing asset prices would do anything other than pay the people who own the assets. Federal Open Market Committee members know this. No one with as much intelligence as these people have could possibly believe such a silly notion. I will say it again. When a lie is told there are two guilty parties. There is the liar and then there are the folks for whom the truth is not good enough.

The stock market was totally managed during 2015, 2014 and 2012. I was wrong in forecasting that the averages would close positive for the year. The effort was made but it failed. I am absolutely sure 2016 is beginning with plans to launch a new leg to the bull market. Now I honestly don’t know that the consortium is strong enough to pull it off.

A sell off on the first trading day of the new year is to be expected. This is to draw in as many shorts as is possible. I am not sure the following squeeze will go as planned. Panic may set in. The public is growing more and more distrustful. Many companies are beginning to experience losses on their buyback programs. Reality may be setting in. The Federal Reserve wealth effect lie is on life support now and somebody may pull the plug.

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
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