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.
Zerohedge reports that at least some of the inside guys are actively selling into this rising market. That is when one is supposed to sell. But CNBC says we should be getting on this train.
The rally’s been good for our 401ks but what is under the rise in stock prices? A whole lot of printed money.
The Dallas Fed just released the April General Business Activity Report and it looks like the middle part of the US is going through an economic rough(er) patch. Quite rough perhaps. But because we live in stock bizarro world now, markets are rising. Bad news means more money from the Fed.
It wasn’t long ago that such an idea was beyond the pale. No longer.
Remember the STOCK Act? It was the law that passed last year that made it illegal for members of Congress to use inside information to trade in their own accounts.
That’s right, until last year a member of Congress, who knew what regulations were going to impact which industries and/or companies was allowed to trade on this information.
If you or I did what they did regularly we’d go to prison.
The great hope for business leaders and those of the political sort was that China would pull the world out of the greatest economic downturn in 3 generations. This has failed to happen and is failing more with each passing day. China isn’t going to save the day. China has been built on a good amount of economic magic and it needs a correction desperately. It likely has one on its hands though this still is not the official consensus.
We have for a long time writen about the property bubble in China. The Chinese real estate system is driven by decrees from Beijing which then tumble down to the local level. Prices are often tossed aside for political reasons. China wants “growth,” or did, at all cost, even if it required a huge misallocation of resources. Because the market has not been allowed to work in China, especially in the real estate sector, it makes sense to expect prices to eventually burst the dam.
Many big businesses have figured out that it’s better to play the game, a game which they can manipulate, than to actually compete in the open market. Why innovate when a company can legislate away the competition?
