News & Analysis
Stocks Are Up – But Why?
Stocks set to pop on Europe debt deal ... U.S. stocks were set to rally at the open Thursday, after European Union leaders agreed to expand Europe's bailout fund and take major losses on Greek bonds – the latest step in an ongoing effort to curb the region's debt crisis. The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were about 2% higher. – CNNMoney
Dominant Social Theme: The stock market is impersonal and precise. It tells the REAL story about the economy.
Free-Market Analysis: We do believe that the stock market provides all the available price information on a given security. In fact, this is a power elite dominant social theme, that the stock market is "efficient" and gives one an accurate snapshot of where the economy is – and is headed.
But what is never mentioned is that the efficiency of the markets involves more than industrial influencers. The world (to us) seems either in a great depression or headed toward one. The term "Great Recession" may soon not be accurate, if it is not already out of date.
Given that the European mess continues, that most banks in Europe (and likely in the US) are under-water, that the US is technically in debt for some US$200 TRILLION if all socio-political promises are kept, that Europe is even worse off in terms of debt and insolvency, that China is dealing with vicious price inflation (along with India and Brazil), that Japan just hiked rates, etc., etc. ... given all these factors, how can markets be going UP?
The US stock markets set the tone for markets worldwide and US markets have been climbing steadily even as the world's economy seems ever closer to collapse. How can this be? Well, we would argue there are extracurricular factors that the world's stock markets recognize that the average investor may not.
The biggest factor in our view is that stocks are now regularly manipulated by the US "plunge protection team" initially set up under Ronald Reagan after the 1987 stock market crash. This "team" to the best of our knowledge has never been disbanded and there is no reason to believe that the US government and sundry market forces have ceased to support US markets, and maybe markets abroad as well.
Then there is the money system itself. The Federal Reserve still stands as the guarantor of last resort for the world, as evidenced by the US$16 trillion that the bank printed during the 2008 economic crisis, much of which was sent abroad as short-term loans.
The world's biggest traders and investors thus have the certainty that market itself is backed by unlimited funding. Between artificial market supports and endless fiat-money availability it is a wonder American stock markets especially have not blasted into the stratosphere. But maybe that would be too suspicious. Here's more from the article excerpted above:
Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET. The eurozone debt agreement came early Thursday at the end of marathon talks aimed to find a solution to the debt crisis in Greece, instability in the banking sector and an inadequate bailout fund.
Under the new plan, Greek bondholders voluntarily agreed to write down the value of Greek bonds by 50% -- which translates into €100 billion -- and will reduce the nation's debt load to 120% of economic output from 150%.
Europe: It's a deal! Leaders also agreed to leverage the region's bailout fund by four or five fold, the statement said, boosting its resources to about €1 trillion. "It's a step in the right direction," said James Schroeder, . "At least they are addressing the issues. The real question is how they are going to do this; and if they stall and no progress is made after all this, markets will recognize that and pull back." All U.S. indexes closed higher on Wednesday as investors started betting that European leaders would seal a deal addressing the debt crisis.
We are used to this sort of commentary by now. There is always some explanation for the market's behavior, though in reality such reasonableness is entirely insufficient. The linkage between the justifications and the results certainly cannot be proven in any scientific way.
The article goes on to tell us that in a CNNMoney survey, "21 top economists are forecasting that gross domestic product, the broadest measure of a country's economic activity, rose at an annual rate of 2.5% in the third quarter, after adjusting for inflation." No doubt we may see further rises in market indices as the continued "good news" pours forth, no matter how doubtful the underlying statistics.
The truth is, as we see it, that the economy is in a full-fledged fiat-money retreat. This happened back in the 1970s as well. No matter what manipulations take place within the securities arena, the price of gold and silver are doubtless going higher. (Editor's Note: our educated guess, not a prediction.)
Conclusion: The bull market in precious metals may not end for several more years, not until 2015 or beyond. It may go even longer if the powers-that-be continue to distort industry by propping up too-big-to-fail companies and by supporting securities markets with illegal manipulations. Ironically, such activities only stoke the very precious metals bull market that the power elite is trying to control.
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Posted by amanfromMars on 10/29/11 04:25 AM
Whenever one offers an opinion/a fact/a fiction which is treated with silence and indifference, and even possibly dismissed as some crazy nonsense akin to the psychotic rantings of a lunar rambler, is the flip side side of that coin and subjective, other party appraisal, always the very real likelihood of that which has been shared, being accurate to a degree which confounds and stupefies. However, the truth whenever it is presented always has a way of finding its way to the top of any agenda, even whenever agendas would try to move heaven and earth to avoid and ignore the herd of elephants in the room, that everyone sees and walks around but would keep on pretending, to try and fool themselves into believing that they do not exist, that they are not there for all to see. All of which would probably be perfectly described as a tendency and mental affliction and affectation towards hubristic delusion or delusional hubris?
In defence and further support of the short and sweet, accurate answer, posted by amanfromMars on 10/28/11 12:50 AM, and which would be a most valiant and noble, and readily available excuse which could easily, viably blame technology, which can be changed virtually overnight in an instant, for all the world's current financially driven and derived woes to be dismissed and revalued/seized upon, would I offer this tale of Snake Oil Economic Models ... ... Click to view link
The alternative heads-in-the-sand stance, with no novel and radically different proposal for change, and just more of the same old, useless and horrendously expensive medicine, guarantees a growing realisation which will expose the evil shame and consciously engineered but systemic flawed corrupt executive administrations of wealth collection and Man management/human resources mining, and which are the present status quo continuity policies of intellectually challenged traditionalists/conventionalists/conservative elitist sections in communities and humanity, and is resulting in the rapid chaotic and catastrophic demise and virtual overthrow of a failed system, which wasn't SMART enough to save itself even whenever technology was offering itself as their saviour.
Although I suppose that is proof positive enough that the system was broken beyond repair with the old guard in positions of power ... ... . and sweeping them away into history was their just destiny and desired fate.
However, miracles do happen and it would be foolish to rule out them embracing SMARTer technologies which lead everything into wholly different fields and would in so doing so, guarantee their survival and a revival at the top of round tables with true knights of realms beyond normal comprehension, rampant and in Creative CyberSpace Command and Control Of Computers and Communications. With such powers, are one's powers absolute, and is one not a prisoner to any being or any system that would imagine to enslave worlds to systems of false promises and government IOUs.
Provoke Confrontation to BetaTest ITs Mettle at your Everlasting, but Most Probably Extremely Short Lived, Peril. The Anonymous Legions which Occupy CyberSpace and Control ITs Communications with Computers and Creative Communities, do not take Prisoners, nor Tolerate the Fools with Tools that would wage War against Systems on Earth, and would Mercifully Rout them in Occupied Virtual Space Territory, Mercilessly.
PS. There is no enemy there, other than that which you would yourself, in your own mind and fevered imagination, create. Do not create adversaries against which you are guaranteed to fail, and fail catastrophically and absolutely. ... ... ... ... . "Adversaries. In 2014 our adversaries - state and non-state - will know that to confront the US and its allies in a conventional, force-on-force fight will be to lose; as Professor Colin Gray has said, 'If an enemy chooses, or has no practical alternative other than to wage warfare in a regular conventional way, US air power will defeat it long before US ground power comes into contact.'
This process of enemy adaptation is already well underway, and so is the US response. Adversaries will avoid engagements that play to Western strengths; for instance, they will seek to deny us access to theatre, using all the political and military levers that they can deploy."" ... .. Click to view link
In such a situation, is it very tempting to provoke a conventional, force-on-force fight/popular revolution, in order to to supply overwhelming might and takeover a nation, on the pretext of spreading democracy and human rights, which might very well be a digital smoke screen and virtual trojan ... ... . " Earlier on Friday, protesters in Syria called for international protection from Nato whose war planes played a vital role in the overthrow of former Libyan leader Muammar Gaddafi.
"God, Syria, we want a no-fly zone over it," protesters shouted in the Bab Tadmur neighbourhood of Homs, while others carried banners demanding international protection, Reuters reports." ... .. Click to view link
IT's a Mad, Mad, Mad, Bad, Sad Damned World, most definitely, and need of AI Change, most assuredly.
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Posted by Dilence Sogwood on 10/28/11 11:53 AM
that was a straw man and you know it!
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Posted by Dilence Sogwood on 10/28/11 11:21 AM
I agree with most of your views on liberty and I love that you put them all in one place, cogently organized. However, at times you fail to see that which is actually free.
Reply from The Daily Bell
Dilence if you think Wall Street is "free" we have a bridge in Brooklyn to sell you ... (And since you run a hedge fund, if we recall correctly, you'll know that's a bad bet! ...)
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Posted by Dilence Sogwood on 10/28/11 11:10 AM
Then you should short stocks. You could short crappy companies, which still go down and hedge yourself by buying indexes. That is if you really believe what you say. Listening to pontification is fatiguing. Go do something. You are still free to trade.
Reply from The Daily Bell
OK, Dilence, you write numerous libertarian articles every day and we'll start to trade. Deal?
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Posted by onebornfreeatyahoo on 10/28/11 07:36 AM
Why has it been going up?
Well, the truth is that nobody really knows for certain.
Another truth is that many will earnestly tell you, with absolute certainty, and total conviction, that they [and only they] know exactly why it has been going up.
These types of people people are either naively delusional , or just plain dishonest.
I could make an educated [or uneducated- depending on your point of view] guess as to why the US stock market has made gains recently, but it's still only a guess, because, at any point in time my available market knowledge, no differently from any other individuals, remains finite and incomplete, making my guess no more or less of a guess than anyone else's guess, or, "absolute certainty".
My guess ["educated" or "uneducated"- take your pick] would be that with both the ongoing European debt crisis, and the rapidly snowballing Chinese crisis:
Click to view link
plus the generally assumed knowledge that in the end, the US is most likely to pull out of its recession sooner than the rest of the pack, that, rightly or wrongly, the US economy is still generally perceived worldwide as being a safer bet than most of the rest of the world, at least for the time being, and that with limited options, many investors worldwide are buying US stocks.
But like I said, that is all just a guess. In reality, just like everyone I really don't have a clue.
However, unlike almost everyone else, I do not really need to have a clue. See:
Click to view link
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Posted by amanfromMars on 10/28/11 05:10 AM
Here is an interesting ... . well, money-launderers charter, surely? ... ... and with some very tasty exceptions and immunities penned therein, although if challenged in a supreme court of law and natural justice would they unravel to expose a system which is in dire straits need of urgent virtual protection and cyber security ... ... Click to view link
Articles 24 and 25 are especially inventive and attractive for any who would wish to think that they can wash their hands clean of catastrophic miscalculations and the shenanigans of others abusing their host's hospitality and services?
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Posted by amanfromMars on 10/28/11 12:50 AM
"Stocks Are Up - But Why?" ... . Thursday, October 27, 2011 - by Staff Report
The short and sweet, accurate answer, DB? The quant algorithms in the high frequency trading programs are not intelligently designed to deal with reality.They are poorly and perversely coded and used to present and represent a false but seemingly successful ponzi market which is to hide systemic failings.
And you cannot deny that whenever you know that the markets are rigged and money grows on trees and is plucked out of thin air by the trillions of dollars and pounds and euros and yen and and and. That is the virtual reality of the existence which IT and media presents to you as the reality on the ground/the programming for the masses.
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Posted by delwyn on 10/27/11 06:10 PM
Sorry - my link was messed up. Reposting
Right, a high gold price is proof positive that leaders are not doing a good job - always has been. The GREATER DEFLATION started with the dot com stock peak and may last until 2016-2018. If it is like the 1930's depression the gold price will lanquish but gold stocks will (from a lower level) soar. Why
they were (in the 1930's) and will be (in the 2010's) mining money money. Homestake gold mine stock ran up to over $500 a share and paid $56 in dividends in 1936. You could have bought the stock for $50 in 1929.
The power elite will want a strong dollar since they will be hiding from all the turmoil (fianancial and physical) in the safety of America. This contrary opinion means most everyone will be short the dollar - not the BANKSTERS. They will get richer. Next prices of all assets, commodities and stuff you buy drop even more. Interest rates will go to 20% as people scurry around to stay solvent. Cash is KING in a deflation. Don't forget it. Get out of debt - ASAP!
DELWYN LOUNSUBURY - THE DEFLATION GURU -
Click to view link
Click to view link
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Posted by Robert Eastman on 10/27/11 04:21 PM
First Hands on the Funny Money get to purchase the "real assets" on the cheap, relatively speaking. With all the QE(#?) is it possible the "money elite" are buying up corporate assets on the cheap? Maybe stock prices should be 3X higher than they already are based on the {24/7?} FRS printing presses. Because of all the misinformation and lack of "real facts" concerning the money supply, only the insiders know for sure.
Because all of the world's fiat money is continually being debased, the strength of the USD is only a relative measure to other "garbage" (ICE DX).
With the absurd low rates of returns on T-Bills etc., it's possible "the money" is finding better values in the stock-market. (If the real rate of debasement is 10%+ who wants to be stuck with 3% bonds?)
Whenever "too much money" shows up to buy... prices always go up, but may still represent "good value" because "real assets" are being bought... versus buying/holding "junk paper!"
Obviously all markets are manipulated... errr... managed by insiders, so outsiders rarely know the real reasons markets "do what they do" and then, only after the fact. Count on it... hard assests will win-out over junk paper!
Reply from The Daily Bell
Our article was written to point out ongoing manipulations.
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Posted by TerryWriterFromPortCredit on 10/27/11 03:21 PM
The good Pastor I do not doubt - however a pawn he most certainly is (to me there is an element of truth in everything he says - but like a good intel' operative you have to separate the wheat from the chaff).
Reply from The Daily Bell
Yes, we never take it all at face value ...
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Posted by TerryWriterFromPortCredit on 10/27/11 03:12 PM
Last post link to Pastor Williams should be
Click to view link
Sorry - T.
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Posted by TerryWriterFromPortCredit on 10/27/11 03:07 PM
The elite are buying up mass amounts of gold and most likely storing it in Switzerland with their other vaulted War Plunder getting ready for a new world currency most likely tied to that precious metal? Are their plans being met with opposition to the point where tempers are flaring?
The Elites and their minions are starting to squabble publicly.
See Keiser Report #201 - Sarkozy tells Cameron to shut up over euro.
Click to view link
Mark Carney Governor of The Bank of Canada and Jamie Dimon JP Morgan fight
Click to view link
Elites hate each other according to Pastor William's Elite source.
Click to view link
Canadians if interested in what your Governor of the BoC and P.M. Stephen Harper who appointed him are up to read "Here Come A Banker Gonna Save You - Run!"
Click to view link
Best - T.
A Mohandas Movement = A Gandhi Outcome!
Reply from The Daily Bell
Thanks. We're never sure about the good Pastor Williams ...
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Posted by budwood on 10/27/11 01:16 PM
The DB asks "why" are stocks up.
The answer is because the way by which markets are being measured is simply by use of a measuring scale that's consistently shrinking. Why is food up? Same reason. Why is anything up?
From another viewpoint, everything is down if the measuring scale is gold.
Reply from The Daily Bell
We are quite aware of the value of gold. We've been writing about it for decades. But stocks have gained in terms of US dollars recently. They have. It's a fact. The trend is UP not down. It's a simple fact. It's real. It exists. It is not a mathematical relationship, either. In other words stocks have not gone "up" relative to the price of gold traveling up at the same time. In fact until recently, gold had moved DOWN a good deal.
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Posted by Hoss on 10/27/11 01:14 PM
Aside from the distinct feature that the money the stock prices are quoted in continues to slide in value, there is another factor at work.
Unless I am mistaken, trading volume is down, and mutual funds have been bleeding from outflows due to withdrawals on a steady basis.
I have seen explicit admissions that the government, through the Plunge Protection Team, and the Fed itself directly intervene in the stock market, to 'prevent panic'. What that means is that stock prices are a PR issue to the administration, and that players with unlimited free money are actively working to keep prices at certain levels.
Furthermore, the very biggest players in the market, the 'banks' that bankroll every presidency, the owners of the money-printing machine and the government, are currently declaring that most of their profits are made in 'trading', which appears to consist of using high frequency trading algorithms on a millisecond basis to shake prices up and down by fractional amounts, skimming off the difference continually.
The stock price cheerleaders on financial cable channels babble daily about why the prices moved one way or another based on the propaganda of the day, intoning seriously about the motivations that drove traders to buy or sell. This is obviously a dump truck load of buncomb. If anybody could say 'why' like that, they would never have to work a day in their lives.
To me, the question 'why' that titles this article means ... the better to fleece you with, my dear.
I'm just an unsophisticated low-life. What I get out of all this is, Stay Away.
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Posted by Robert Eastman on 10/27/11 12:45 PM
Bill Ross is 100% correct... only the "numbers" are going up, not the real value.
If it takes $2400/oz. gold in today's fiat currency's purchasing power to equal the same purchasing power of 1980's $835/oz. gold's puchasing power... then $2000/oz. gold IS NOT "a new record" for "the value of gold" only a "new price-numbers record" for gold.
Like-wise prices going up on the stock is actually only a "lagging indicator" of the debasement of the currency. What the "real value is"... IS anybodys' guess (especially because the M3 numbers are no longer available).
Just imagine if there would have been a "bread price exchange" in Germany from 1919 through 1923 with bread at 1 mark per loaf in 1919 and in 1923 a loaf of bread at more than 700 million marks. What would those numbers tell us about the "true value" of bread... Absolutely Nothing! It only indicates the Absolute Worthlessness of the German Mark in 1923.
Likewise... NOTHING can be determined by "higher numbers" in any markets, except that there is "total confusion/ignorance" of "true values"... Exactly what the PTB want... Fear Mongering on Steroids... so that the elite can steal away all the wealth!
Reply from The Daily Bell
We are quite aware of the value of gold. We've been writing about it for decades. But to say that US currency does not "buy" anything, or that "nothing can be determined by higher [dollar] numbers" is simply untrue. Stocks have gained in terms of US dollars recently. They have. It's a fact. The trend is UP not down. It's a simple fact. It's real. It exists. Bread is not yet valued at 700 million dollars per loaf. Maybe eventually. But not yet.
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Posted by rossbcan on 10/27/11 11:14 AM
DB: "Stocks Are Up - But Why?"
... duh. Perhaps because, like gold and commodities, the fiat currency that stock "value" is referenced in terms of "is down"?
Reply from The Daily Bell
The trend is up and has remained up for the most part recently. That was the issue we were addressing.
