Def, that's no wonder - after all we all have been conditioned by this mania to believe that. this year has been a conditioner par excellence, as support levels in various indices have held on every pullback. not entirely true anymore, as the Dow, the trannies, the utilities, the banks, the retailers, the insurance stocks, ETC. have all fallen through various supports <GGGG>,but if you look at the Nasdaq, the SPX and OEX, they all have bounced up whenever they looked like they were on the brink of a big decline. as to the vast majority that's unprotectedly long, i have to agree with that, but as we could see last year, most of them remained unperturbed in the face of big losses and simply sat out what all the media termed a global financial crisis, trusting in the market's ability to bounce back. presto, easy Al came in and bailed them all out...and that wasn't the first time he did so. so people are unconcerned, and while that is complacency, it also means they won't panic easily and sell. if they don't sell, where's the selling pressure going to come from that topples the market? my favorite choice are foreigners, but i have yet to see them abandoning U.S. stocks. presumably they too live in the fuzzy comfort of knowing that Al is going to bail them out if need be. this morning on CNBC Europe an analyst opined that the Fed could not possibly raise rates as that could possibly endanger the wealth effect that depends on rising stock prices and could therefore kill the nascent recovery of the global economy by endangering economic growth in the U.S.
at the very same time, the first whiners came out asking the ECB to rescind it's decisions w/regards to gold, 'to restore liquidity to the market'. so there it is, the Fed is now openly asked to do what it can to maintain the bubble (of which Al isn't sure whether it exists or not). the ECB is asked to stop it's own bubble-endangering maneuvers.
what do you think, will the Fed act in accordance with political expediency, or is it prepared to risk a bear market?
the answer is simple, right? after all it was the Fed's way-too-loose monetary policy that created the bubble in the first place. why would they undo their own work? just listen to guys like Poole and McDonough spout new era nonsense and you will realize that these guys will be the last to go and try to endanger the bubble.
so many vested interests now exist that are depending on the bubble's continuation, that they will do everything in their power to keep it going.
we often marvel at what looks like blatant manipulation of the market, and guess what, it IS manipulation. what's a few millions here and there to keep the monster propped up, when everybody can profit so much from doing so?
then there is the theory (gaining credence within the Fed, i'm sure), that the Fed can simply not ALLOW stocks to fall too much, as too many highly leveraged players would go out of business, bringing the whole system to a screeching halt.
understand, i'm just playing devil's advocate here, but i'd be happy if you could take my arguments apart and try to prove why i am wrong...the whole thread please...take this post apart and let me know why we will have a waterfall decline ANYWAY. |
