Yeah, that's where research is taking me. Starting last fall, what we saw was systematic removal of players outside the regulatory domain.
Now, they're back - and again supply, demand, prices and valuations are being distorted by non-productive financial intermediation.
I couldn't express it better than Vi, here:
"It's printing against a black hole of collapsing debt, and printing now has the upper hand. These markets have gone up from 2002-2007 because of financial derivative bubble, They crashed hard because it collapsed. Now derivatives were finally reliquified like in 2002-2003, only with a whole lot more cash, so we'll have a lot of inflation. If they keep doing it (and the derivative pyramid requires it; it's a Ponzi scheme of epic proportions), hyperinflation.
In reality there has been no bull market in 2002-2007, the real economy outside Ponzi finance was not doing well, but that trend was masked by declining purchasing power of the dollar.
The explanation is very simple - newly printed money goes into the market, in part exiting the treasury bonds, the market goes up."
Message 25701232
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Tomorrow, the effect of interest rate changes will be interesting. Bernanke's plan is in trouble, and the effect on markets could be negative.
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"As a small fry, the thing that scares me most is the possibility that players taking huge positions may do an about-face, causing big price drops and volatility... That's what I think is happening here; based on fundamentals, I'm waiting for someone to pull the rug out. I just don't trust what I'm seeing."
Message 25652290
Jim |
