Stock Market Fireworks Starting Tomorrow

Before the mob gooses the stock market, they always feign weakness, draw in short sellers, then load up on bullish derivatives.  The measure I use as an indicator is an index of total ETF volume divided by total Russell 3000 volume which is an ETF-free index. For those unfamiliar with the stock market, we are talking about exchange traded funds. These are not the only derivatives the mob uses but it is an easy indicator to follow. Despite the complexity of the trading algorithms, the actual strategy is always simple.

Get free money from the Federal Reserve, manipulate short sellers into covering and buy enough actual shares to push up the price of the derivatives they trade. Loses on stocks are not a problem because derivatives profits more than offset that, always . Most importantly, anytime this indicator spikes, everything legal and illegal is going to be done to elevate the overall market. Assurance to corporations with stock buyback programs is signaled by the Fed that they have their backs. Success for the mob is not guaranteed but the number of times this has not worked perfectly can be counted with just a few fingers.

The investing public including professionals is extremely naive but they are slowly starting to smarten up. When this stops working, the market will crash like nothing you have ever seen but it is a bad bet that it will on any one occasion. Stock owners will regret having ever heard of the stock market. I have basically been in cash since early 2013.


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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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