Record high corporate profits peaked a year ago. Now gamblers are buying smoke and mirrors...
NYSE Composite with S&P Operating earnings (black line):
"I know we can't fix the economy, but can't we at least print more money?"
The clarion call for QE4 is rising. Why, no one can say. The most cogent argument seems to be, it didn't work before, so let's try it again.
ZH: Aug. 11, 2015:
The Fed Is Out Of Options (Except QE4)
"they're in a kind of silly loop where they did QE expecting a reaction... didn't get it.. and then they did QE again because it didn't live up to their expectations... but I think they have no other options, if things get negative on the economy, QE is all they can do."
It's that kind of moral hazard that creates the insane level of risk we face today:
The Fed can't fix unemployment, we've seen that for six years straight
The Fed can't fix the economy now heading into recession, despite six years at 0% and $4 trillion in new cash
The Fed can't fix corporate profits, now declining
The Fed can't prevent a crash, we saw that in 2008.
The only thing the Fed can do is to encourage gamblers to throw their money away at a lethal juncture. Bungee jumping with a noose.
Just the mere suggestion of more QE, keeps gamblers at the table where they will be milked for everything they have left.
