Will the current bounce last? Will analysts keep setting the bar low to help stocks rise? beating bad numbers remain the game by which stocks are priced? The future level of stock market indices cannot be predicted because the calculations that will go into future market manipulations are yet unmade.
BY: DR.Benevolence
The “Government Sachs” article[http://bit.ly/sm3l] deserves careful contemplation. Goldman Sachs was able to leverage its bailout by shrewdly calculating that laissez-faire regulation had made it possible for AIG executives to bet the solvency of the American system – a solvency that the U.S. government would find necessary to defend at taxpayer expense. Hence, the Goldman Sachs bet against AIG was actually a bet against the American taxpayer.
It is not without consequence that the Fed is creating massive amounts of money for the U.S. Treasury to leverage mega-investors and hedge funds back into financial markets on the long side. Many market observers claim Geithner’s plan will work. The question should be: ‘Work to what ends?’
There is an increasing possibility — evident in various ways during the last couple weeks — that the Geithner plan may inflate U.S. equity values back into a range that would put the DJIA around 10,000 within 18 months, perhaps much sooner. (While 10,000 is not 14,000, it would constitute something close to a 50% retracement.) If this occurs, the move will be billed incorrectly as a new bull market — as though the problems that created the bear market of 2008-2009 were undergoing sufficient repairs.
BY DR. BENEVOLENCE
President Obama has given the nation hope, but is it enough? Indignation remains widespread because Wall Street has failed its public trust and politicians have yet to find ways to counter outrages with real justice. “Heads need to roll,” proclaimed Moneycentral’s Jim Jubek recently, for if we fail to punish wrongdoers we are bound to repeat this disaster
By: Dr.Benevolence
If the economy is weakening should we do everything in our power to get it moving again? As explained in Nutting’s report, an unprecedented amount of fiscal and monetary stimulus is being injected. What is not explained is how this beckons unprecedented inflation, heavier taxation and further weakening of the U.S. dollar. Now that we’ve started down the stimulus road, how long do we continue transferring wealth for stimulus sake?
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