The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: bentway	5/12/2009 12:37:23 PM
	of 306849

This Rally Is for Suckers, Courtesy of the Fed newser.com (Newser) – The Dow has soared a whopping 30% since March 9, but Andy Kessler doesn’t think the good times are here again. “This sure smells to me like a sucker’s rally,” he writes in the Wall Street Journal. Earnings aren’t up. The market is just responding to three government actions: The “stress tests” have made nationalizations seem unlikely. With the Fed’s rate at close to zero, only stocks offer decent returns. The Fed is basically printing money, buying $300 billion in bonds and $750 billion in mortgage-backed securities. The result? A big rally, into which the banks are selling stock to raise capital. “It’s almost as if someone engineered a stock-market rally to entice private investors to fund the banks rather than the taxpayers,” writes Kessler. “See why I believe this is a sucker’s rally?” SOURCE: Wall Street Journal

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