Not bad. The economy must be just killing it! No? Well…Then why is the market ripping and roaring? You say they’re handing out free chips at the Fed window and the cards are stacked for the players? Oh excellent. That seems like a good way to run an economy. Pass me a martini.
It wasn’t long ago that such an idea was beyond the pale. No longer.
Stocks keep going up no matter what. Every day practically we hit new highs. The Fed keeps dumping money into the financial system. The Bank of Japan is printing on a massive scale too. Housing prices and rents are up significantly in New York and in Washington DC, the 2 cities closest to the printing of new money.
“Very clever men have a capacity for very great mistakes which often elude simpler souls.”
Fight the Fed if you want. It’s rotten. It stinks. But it is reality.
Many of us have watched the climb of the stock market since March of 2009 with a general sense of of unease. We’ve watched our central bank, the Federal Reserve, do all that it could/can to move shares up. Every time the markets faltered the Fed came to the rescue and dumped piles of cash on Wall Street. Check out this chart of the correlation between the Fed’s printing efforts of the past few years and performance of the S&P.
These sorts of reports come out every once in a while. The theory is that if they sell orders from “insiders,” executives at companies, etc, sharply increase a move down in the market is on its way. (Since the insiders likely have access to privileged information.) Sometimes these volume spikes from insiders mean something, sometimes they don’t.
What was the best performing stock market in the world in 2008? Zimbabwe.