Friday, May 17, 2013
That fake phony market keeps going up n' up..
All that free Fed money will tend to do that.. As long as the champagne keeps flowing for free, there's always going to be gullets open wide to receive it all.
But there always has to be assigned an official 'reason' each trading day why stocks do as they do.
Reasons seem to make everyone feel better.
So today's 'reason' this market rose: Consumer Confidence -- why haven't you heard?? May reports the highest figures in six years! See the experts expected a number of 78 and instead, it was 83.7 meaning of course Americans felt better about their financial and economic prospects..
Of course when it drops next month, it will be dismissed then ignored.
Gotta only accentuate the positive.. eliminate the negative..
Of course that 83.7 is utter bullshit.. Shhhhh! Don't tell them that.. Let it be our little secret between us.. They'd only laugh at you anyways...
The Board takes surveys via telephone to ask people who don't seem to mind being disturbed during the dinner hour, their views of the economy.
And ever wonder many people they poll to get an accurate barometer of the consumption and shopping mood of 310 to 315 million people?
Do they poll 50,000 people? 100,000 people? 500,000 people?
They poll 5,000 people.
Based on 310 million Americans, statistically that comes to 0.000016%
That's 16 hundred-thousandths of 1 percent of Americans surveyed... And we are to believe the market rises 50-60 points off that?
The price of everything is determined by supply and demand. No exceptions to the relationship between supply, demand, and price.
Now prices can't be faked but can be manipulated.
It requires either soaking up supply (e.g., the Fed buying $85 billion a month of paper) or increasing demand (e.g., paying $150 for a dozen roses because it's Mother's Day).
So to put it simple, supply of shares is shrinking. and demand for stocks is rising. Money is going into equities, thus creating the growing demand.
There's just too much liquidity in the markets and like food left on the floor overnight, every rat and roach is coming out of the woodwork to get their 'cut'.
And really that's what they are.. let's not sugarcoat it..
So we get back to a point we make repeatedly here -- what is the motivation for anyone in any position of power to do anything to make our lives better as long as the barometer that most naively believe represents the state of the economy, is shining strong?
What is the motivation for government to create jobs? What is the motivation for private sector companies to hire outside of temps and part-timers?
We as a nation have no hope of anything ever improving in reality.
Squeaky wheels always get the grease.