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Thursday, January 26, 2012

Video: Why Dow rises when US economy falters



Thought this was good video to share.  Its about 5:30 long.  TrimTabs' CEO Charles Biderman explains the reasons stocks have continually gone up, why they don't seem to care that "the Fed is pumping $100 billion in newly created money a month" to keep the economy running, and why a drop is inevitable.

I don't agree with 100% of what he says-- for instance he tends to blame Washington much more for the housing bust than I do.  I place most of the blame specifically on banks who enticed people to borrow on low interest with no background checks because they already had "buyers" for the mortgages before that were even created then packaged so banks knew they wouldn't be on the hook when the home buyers defaulted.

Overall though, he is accurate which is why I share.  If you find yourself getting caught up on technical talk and confused, don't fret- the bigger picture is easily understandable.

**  For those who can not make the video work for some reason, the link is:

http://www.youtube.com/watch?v=IUvmUtWm-HE