Prediction Comes True

[InTheLight]

Plucky the chicken spoke and the market reacted negatively so Plucky the chicken come back and said "only kidding folks" we're not going to taper.

The market reacted positively. So what was your point?

If it was a simplistic as you think the market would have rebounded in one day after the Fed gave reassurances, and not taken 3 weeks.

Because demand is being artificially created by the Fed. If the Fed stops artificially creating demand, demand drops. Yo.

On the one hand you say the Fed is buying up too much of our debt and propelling the stock market, and now you are saying that they are artificially squeezing out other entities, and if they would only get out of the way the market would be fine. You do realize that there is little demand for US securities which is why the Fed has to buy them to keep interest rates low? If no one was buying them the US would need to increase yields in order to attract outside buyers.

Right now, the yield on 10 year U.S. Treasuries is about 30 percent above its 50 day moving average. That is the most that it has been above its 50 day moving average in 50 years.

Big deal. Yields are historically low. Any movement, even the paltry 0.17% increase recently is going to look big.

Like I mentioned above, we are moving into uncharted territory and this data doesn't really fit into the models used by derivatives traders. The yield on 5 year U.S. Treasuries has been moving even more dramatically...[1]

Good, the market is starting to increase yields ahead of the Fed's anticipated announcement to start tapering.

My mind is made up. It's wrong to have a debt based fiat monetary system designed to put us in debt and keep us in debt indefinitely.

There's only two reasons to have a monetary system like that. 1. To make us

< snip off topic crap >

 

[Don]

Gentlemen - the news isn't that great....
http://www.bloomberg.com/news/2013-...ernankecare-as-worst-win-in-stocks-bonds.html

Carl Giannone says he’s given up hunting for quality stocks. Now he’s simply riding the wave of upward momentum in the U.S. market.
“It’s a game of musical chairs,” said Giannone, who manages a team of stock pickers at T3 Trading Group LLC in New York. “You just want to make sure you can sit down.”

The Federal Reserve’s near-zero interest rate turns five years old next month, the longest period without an increase in history. Coupled with more than $3 trillion of asset purchases, it adds up to “Bernankecare,” said Joshua Brown, chief executive officer of Ritholtz Wealth Management in New York. And it’s causing parts of the market to behave strangely. Stocks of companies with weak balance sheets are rising twice as fast as stronger ones; junk borrowers get rates lower than their investment-grade counterparts did before the credit crisis; and initial public offerings are doubling on their first day of trading.

While in the minority, some investors say prices have climbed so high it’s possible to look ahead and see an ugly end. Laurence Fink, chief executive officer of BlackRock Inc., the biggest U.S. money manager, said in an interview with Bloomberg Television on Nov. 12 that he feared a bubble and the Fed ought to quit buying so many securities.

The trick will be to carefully watch, and get out just before the "pop"....

 

[poncho]

< snip off topic crap >

You can < snip > all you want to Crabby but it doesn't change the fact that our economy is being "managed" by foreign bankers in order to suck all the wealth out of the country.

Plucky the chicken is lying to you. What he says is a "recovery" is just another bubble built on fraud, and it will pop. You and Plucky ain't going to be able to < snip > what happens when the 400 and some trillion dollar derivative bubble pops. And when it does this is what you'll see . . .

Ordinary Americans are living in a depression already. The only reason we don't see the long bread lines is because half of all Americans have EBT cards. In other words Plucky has < snipped > the real picture of poverty out of our sight. But it's till there and growing everyday.

We'll see how happy you are when Plucky decides to do "bail ins" and confiscate your savings and retirement accounts to "save the banks" for the greater good.

“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” John Adams

"People, governments and economies of all nations must serve the needs of multinational banks and corporations." Zbigniew Brzezinski

 

[InTheLight]

You can < snip > all you want to Crabby but it doesn't change the fact that our economy is being "managed" by foreign bankers in order to suck all the wealth out of the country.

Plucky the chicken is lying to you. What he says is a "recovery" is just another bubble built on fraud, and it will pop. You and Plucky ain't going to be able to < snip > what happens when the 400 and some trillion dollar derivative bubble pops. And when it does this is what you'll see . . .

This is what your ilk was predicting back in late 2008 and 2009. Rioting in the streets, martial law, food riots, etc.

"There is a wolf chasing the sheep!"
"There is a wolf chasing the sheep!"
"There is a wolf chasing the sheep!"

 

[InTheLight]

Back in May 2013 I said this:

Originally Posted by InTheLight
The Fed's quantitative easing is helping the stock market, for sure. Investors are getting nearly nothing for returns in interest rates causing them to buy stocks.

But corporate balance sheets are strong. Profit margins are strong. Earnings are strong. I expect we will see the S&P 500 at 1800 by the end of the year and it will keep going for several years. I wouldn't be surprised to see the Dow at 20,000 in the next five years.



http://www.baptistboard.com/showpost.php?p=1985969&postcount=7


Back in November 2013 I said this:

Well, today the S&P 500 reached 1,800.

And now we have this...(it hit 1925.76 at 3:46 pm EDT today, which was a new record)

 

[Crabtownboy]

Baloney, a few weeks ago when the fed suggested he "might" ease it off it started dropping like a rock. You can't prop the market up on thin air like this and think there will be no consequences.

I have watched your pronouncements on the market for quite a long time. The primary thing I have learned is that you have no idea about the market or investing. My guess, and I may be wrong, is that you have never researched and bought stock on your own. If you invest my guess is you allow a broker to select your purchases. Remember Chicken Little?

ps -- I found early on that it is a big mistake most of the time to follow the advice of a stock broker.

 

[Crabtownboy]

You can < snip > all you want to Crabby but it doesn't change the fact that our economy is being "managed" by foreign bankers in order to suck all the wealth out of the country.

I have no authority to snip anything ...

Ordinary Americans are living in a depression already. The only reason we don't see the long bread lines is because half of all Americans have EBT cards. In other words Plucky has < snipped > the real picture of poverty out of our sight. But it's till there and growing everyday.

Thank the GOP and their policies of helping the rich and pushing the middle class out of existence.

“There are two ways to conquer and enslave a nation. One is by the sword.

The other is by debt.” John Adams

Exactly what the GOP has been doing.

 

[thisnumbersdisconnected]

ITL, you might want to ask that this thread be closed. It's been hijacked by one of the resident communists and the vapid yet rabid anarchist.

That wasn't a couple of weeks ago, it was June 21st. I know because I bought some stock that Friday. The market recovered by July 10th. And I'm telling you it's not "thin air". There are record earnings over the past couple of years. The QE is thought to contribute 20% to the run-up in stock prices. Gradually withdrawing it will not cause a crash.

Yes it will, as this March 21 news item proves is already happening.

Wall Street Dispatch: Fed Reduces QE And Investors Reduce Risk Appetitehttp://www.wallstreetdispatch.com/fed-reduces-qe-and-investors-reduce-risk-753.htmlhttp://www.wallstreetdispatch.com/fed-reduces-qe-and-investors-reduce-risk-753.html

If quantitative easing helped boost stocks, then reducing QE, everything else being equal, should put downward pressure on stocks – particularly if economic and earnings growth remain sluggish.

What matters to investors from the above discussion is the impact that Fed policy, and actions, will have on various asset classes. Everything else being equal, the best interpretation can be achieved if we can gauge investors’ risk appetite. So the best question we can ask is what will the new Fed policy do to investors’ risk appetite? Instead of trying to opine qualitatively on this issue, we should look at what the markets have been performing since the beginning of 2014:

Gold is up nearly 10%, Stocks are unchanged, while 10 Year Treasury bonds are yields have dropped by 7% since the beginning of the year currently yielding around 2.75% after starting the year near a 3% yield. Clearly, investors have adjusted their risk appetite after the Fed announced its QE taper in December 2013.

Note it is stated "stocks are unchanged." Essentially that is true, as the percentage of daily and even monthly fluctuation in the overall stock market value over the last four months has been ± 1%. The real telltale, however, is this chart.

Gold Versus Change in 10 Year Treasury Yields Versus S&P 500 Jan 2 – March 20Chart Courtesy Yahoo Finance

One would think that Treasury yields would go up once the Fed reduced its bond buying program but the opposite has happened. Surely, it is the lack of inflation expectations but also it’s a reflection of a decrease in risk appetite. Similarly, Gold is not up because of inflation fears but because it is perceived as a safe haven in time of turmoil.

 

[Revmitchell]

I have watched your pronouncements on the market for quite a long time. The primary thing I have learned is that you have no idea about the market or investing. My guess, and I may be wrong, is that you have never researched and bought stock on your own. If you invest my guess is you allow a broker to select your purchases. Remember Chicken Little?

ps -- I found early on that it is a big mistake most of the time to follow the advice of a stock broker.

I was going to respond to this but I can't stop laughing.

 

[thisnumbersdisconnected]

I was going to respond to this but I can't stop laughing.

Yeah, investment strategy assessment from a communist?

 

[InTheLight]

this March 21 news item proves is already happening.Note it is stated "stocks are unchanged." Essentially that is true, as the percentage of daily and even monthly fluctuation in the overall stock market value over the last four months has been ± 1%.

Boy, did you pick the wrong endpoints! In the last four months the S&P is up 10.4%. Overall, the S&P500 is up 5% since the start of the year. A 5% increase over 6 months is hardly unchanged.

The real telltale, however, is this chart.

Gold Versus Change in 10 Year Treasury Yields Versus S&P 500 Jan 2 – March 20Chart Courtesy Yahoo Finance

Chart is mostly irrelevant.

Similarly, Gold is not up because of inflation fears but because it is perceived as a safe haven in time of turmoil.

Yeah...you might want to check your data. The price of gold YTD is essentially unchanged; the S&P500 is up 5%. If you look at this chart your selective endpoint picking of mid-March was working for you with gold, currently it's not.

 

[InTheLight]

S&P 500 topples another record; benchmark hits 2,000

U.S. stocks rallied on Monday, with the S&P 500 crossing 2,000, lifted by a round of corporate deals and optimism that the European Central Bank would embark on further moves to stimulate the European economy.

Cue the naysayers! Ha!

(Preemptive comment: Yes, Virginia, there will be a correction.)

 

[webdog]

S&P 500 topples another record; benchmark hits 2,000

U.S. stocks rallied on Monday, with the S&P 500 crossing 2,000, lifted by a round of corporate deals and optimism that the European Central Bank would embark on further moves to stimulate the European economy.

Cue the naysayers! Ha!

(Preemptive comment: Yes, Virginia, there will be a correction.)

What is sustaining this besides optimism?

 

[InTheLight]

What is sustaining this besides optimism?

Same thing that always causes market gains--Strong corporate earnings. GDP growth was strong last quarter after a bad first quarter. Also positive trends in consumer spending and confidence and positive jobs reports.

The Fed's quantitative easing program is almost completely tapered to nothing (and wasn't that much anyways), the market knows there will be interest rate increases and will react when they occur.

 

[webdog]

Same thing that always causes market gains--Strong corporate earnings. GDP growth was strong last quarter after a bad first quarter. Also positive trends in consumer spending and confidence and positive jobs reports.

The Fed's quantitative easing program is almost completely tapered to nothing (and wasn't that much anyways), the market knows there will be interest rate increases and will react when they occur.

Still think it's smoke and mirrors based on the information they want you to have. I still feel the whole truth is not being told to maintain the market, jobs being a prime example.

 

[InTheLight]

Still think it's smoke and mirrors based on the information they want you to have. I still feel the whole truth is not being told to maintain the market, jobs being a prime example.

There are 500 companies that comprise the S&P 500 index. There are 3,000 companies in the Russell 3000 index. All these companies report audited financial results every fiscal quarter. Are the majority of them lying about their results? Not likely.

If the whole truth was being withheld to maintain the market, they (whoever "they" are) sure have taken their sweet time with the recovery. This is the slowest recovery in history. If you were manipulating the economy why would you have this drag out so long?

 

[webdog]

There are 500 companies that comprise the S&P 500 index. There are 3,000 companies in the Russell 3000 index. All these companies report audited financial results every fiscal quarter. Are the majority of them lying about their results? Not likely.

If the whole truth was being withheld to maintain the market, they (whoever "they" are) sure have taken their sweet time with the recovery. This is the slowest recovery in history. If you were manipulating the economy why would you have this drag out so long?

To keep the boat afloat. You don't think it's possible for consumer confidence that are contributing to profits to be artificial? This confidence is all based on "fact" that the job market is better, housing market is better? We will see yet another correction in the housing market. Jobs numbers are a joke.

 

[InTheLight]

To keep the boat afloat. You don't think it's possible for consumer confidence that are contributing to profits to be artificial? This confidence is all based on "fact" that the job market is better, housing market is better? We will see yet another correction in the housing market. Jobs numbers are a joke.

It is circular reasoning. Consumer confidence is up because the stock market is up. The stock market is up because consumer confidence is up. Repeat. It doesn't work that way.

The earnings reports are real. This is what is driving the stock market. Probably 70% - 80% of it. Consumer confidence, employment, housing starts, all that other data is bonus stuff that adds on top of the earnings reports which gets the stock market to new highs.

The Federal Reserve knows the employment situation is not strong, that the numbers are deceiving. Fed chair Janet Yellen continuously addresses that, including recently. Wall Street knows employment is not strong.

Same thing with the bond buying program. It's been tapered down to almost nothing. Wall Street knew it was going to end. Same thing with interest rates. They will go up. When? Sometime next year. Meanwhile if the Fed keeps telling people that interest rates are going to rise and gives hints as to when that will occur, it softens the shock and acclimates investors to the idea, thus (hopefully) heading off any massive losses.

Aside from automatic payroll deductions for 401k, I'm not investing in the market right now. Stocks are a bit overpriced. The market is setting new records almost weekly. I'm sitting tight on my current positions but I have a little bit kept aside for when the correction occurs so I can snag some bargains.