http://www.youtube.com/watch?v=BlK62rjQWLk
Bottom line, the the boyz on Wall Street pulled off yet another successful bonus season, ass raping the American public.
The only question now is who will be the bagholder this time? Many a pundit thinks this rally won't end until the small investor gets sucked in for the umpteenth time this decade just in time for Wall Street to offload its merchandise in one more pump and dump.
I wouldn't be so sure about that. Except for a month here and a month there, outflows from stock mutual funds have been relatively steady since the March 2009 low. Also, that's some serious wishful thinking to believe there is a always going to be a greater fool ready to show up and buy your overpriced stock. For those playing the greater fool game, I would be careful to look in the mirror once in a while and ask if the greatest fool isn't looking you in the eye already.
Bernanke's latest Middle Class Shaft-o-Rama
Still, I acknowledge, owing to Bernanke - the greatest market manipulator in the history of the planet - the relentless stock rally continues apace as all that fresh printed QE2 money finds its way into stocks, commodities, gold and silver, while totally bypassing the real economy.
QE2 was announced in late August at the aptly named "Jackson Hole" Fed Circle Jerk. Ostensibly, the purpose of QE2 was to lower borrowing costs to allow households to further gorge themselves on debt and wrap the noose tighter around their necks. Unfortunately, that has not been the case, since from that exact date, unacknowledged by Bernanke, borrowing costs (which are abitraged to Treasury interest rates) have grown inexorably higher since that date. No surprise, the easily duped "The Economist" was along for the ride and just this week (January 1st-7th), "Proceed with caution" (page 11), tells us with straight face that the goal of QE2 was "buying bonds with newly created money in order to push down long-term interest rates and stimulate lending". Ok, so much for the marketing literature, the chart below is the reality: In red and green ("It's Christmas!") are Wall Street's goodies, i.e. the higher stock market. In purple, is Main Street's lump of coal i.e. higher interest rates (.TYX) ) (aka. Long bond)
So, for anyone with half a fucking brain or an ounce of honesty, QE2 has done the exact opposite of what it advertised for several months now i.e. raised borrowing rates since the day of inception. In fairness, QE "Quantitative Easing" is aptly named i.e. a new easing lubricant with which to shaft the Middle Class, in the name of Bernanke, Wall Street's greatest Bukkake whore, ever. I suggest "The Economist" starting printing in 4-ply, so I can wipe my ass with it and feel that I am getting something near par value. The current glossy version isn't giving me enough "traction", if you know what I mean.
QE2 was announced in late August at the aptly named "Jackson Hole" Fed Circle Jerk. Ostensibly, the purpose of QE2 was to lower borrowing costs to allow households to further gorge themselves on debt and wrap the noose tighter around their necks. Unfortunately, that has not been the case, since from that exact date, unacknowledged by Bernanke, borrowing costs (which are abitraged to Treasury interest rates) have grown inexorably higher since that date. No surprise, the easily duped "The Economist" was along for the ride and just this week (January 1st-7th), "Proceed with caution" (page 11), tells us with straight face that the goal of QE2 was "buying bonds with newly created money in order to push down long-term interest rates and stimulate lending". Ok, so much for the marketing literature, the chart below is the reality: In red and green ("It's Christmas!") are Wall Street's goodies, i.e. the higher stock market. In purple, is Main Street's lump of coal i.e. higher interest rates (.TYX) ) (aka. Long bond)
So, for anyone with half a fucking brain or an ounce of honesty, QE2 has done the exact opposite of what it advertised for several months now i.e. raised borrowing rates since the day of inception. In fairness, QE "Quantitative Easing" is aptly named i.e. a new easing lubricant with which to shaft the Middle Class, in the name of Bernanke, Wall Street's greatest Bukkake whore, ever. I suggest "The Economist" starting printing in 4-ply, so I can wipe my ass with it and feel that I am getting something near par value. The current glossy version isn't giving me enough "traction", if you know what I mean.
Suffice to say if us little guys don't show up soon to throw what little worth we have left at this market, things could get quite interesting. You see, usually when the little guy shows up, the institutions take full advantage of increased buying volume to unload their positions - a process called distribution. It's a relatively orderly process of parcelling out a steaming turd from the big hand to many smaller hands. However, in the event the beleaguered small guy doesn't show up this time, well that would have big guys falling all over each other to get out the same door into a bidless market. Suffice to say when piranhas start turning on each other, things can get a tad bloody.
When, not If
To some, those of us who are cautious at this juncture are like the Boy Who Cried Wolf - continually sounding the same alarm. And yet, not withstanding the early warnings, when the wolf came it ate everyone. Likewise, anyone owning stocks in this artificially inflated market, attending an eroding or at best bottom-dragging economy, is either delusional or trading on the :15 minute boundary.
Booyah Skidaddy !!!
