Euphoria On Wall Street

I am still short, and will take this rally as an opportunity to buy more put options on several overvalued stocks. (If their prices come down, which so far, they haven't.)

Traders and big banks are buying stocks because they have nowhere else to put their money.

This is not a good reason to buy stocks. The FED is trying to reflate the world. But all their bubble blowing will be in vain, because stock market bubbles do not stimulate demand.

I know it is very difficult to not jump on the bandwagon, but if you can refrain, you will be glad you didn't join the party.

While others are suffering from a terrible hangover, you will have enough cash to make real, solid investments that pay you cash. You will be able to buy assets like real estate and large dividend paying blue chip stocks. The party crowd won't, because they will have lost their gains...again.

Remember your buddies bragging about all the money they were making in Tech stocks that you thought were too risky? Remember what happened to their retirement funds when the tech bubble burst? Do not chase returns. It is the sure way to financial ruin.

In order to believe in the stock market rally we are seeing you must believe at least a few of the following:

1) Value can be created by devaluing currency.

2) Current debt levels are sustainable, for financial institutions, households, and other corporations.

3) Our Federal Debt can be reduced without a period of economic contraction.

4) Average consumers are not tapped out, they are ready to spend again.

5) The FED inflating stock prices will cause no long term damage to our economy.

6) Corporations and consumers will do well in an inflationary environment.

7) Corporations will make more money as the world's financial system implodes.

Unless Bernanke is mad, he would not have authorized QE2. I am assuming he is not crazy, and his intention is not to destroy our economy. Therefore, he must think DEFLATION, not INFLATION, is taking hold of the economy.

What he is doing is like maxing out your credit cards to do a major remodel so your neighbors will think you are rich even though you just lost your job and are deeply in debt.

This is what he is doing to our country. I don't even think he realizes it. I think he believes he is doing the right thing. I think he believes he can stop a depression from happening. He is wrong. I just hope the unintentional damage he does in the process won't destroy this country I love.

What Are The Voters Trying To Say?

That is what Judy Woodruff asked on "The News Hour" on PBS tonight.

I am not trying to be crude, but I am going to be.... prepare yourself.

Because I am going to be crude. Sometimes crude is necessary.

Judy, the voter's are saying: "____-you!"

Sorry. Obama acted like an arrogant power hungry tyrant who thought he was voted in because the voters wanted a quasi-socialist state. THEY DON'T.

Independents who voted for Obama (NOT ME) wanted CHANGE. They were sick of the BIG BANKS getting bailed out by the little guy. They knew the Bush-Paulson -Bernanke-Geitner deal was evil and they wanted something different. They wanted someone who told the truth...they didn't get it. They wanted INTEGRITY, they didn't get it. They just got more TARP, more BAILOUTS, MORE GEITNER, MORE BERNANKE.

They got an opportunistic Socialist that thinks BIG GOVERNMENT is the answer to EVERYTHING! They got a control freak who wants to impose his taxes and his vision of "change" on them. They didn't like it.

Stay out of my pocketbook. Stay out of my business. Stay out of my bedroom. Maybe then, I will consider funding your escapades. Maybe...probably not.

This is what Independent thinkers and young voters are trying to tell you politicians. Ignore us at your own job loss.

http://www.cnbc.com/id/39965179

And Judy, with the utmost respect...dig deeper. I like you. Alot better than Maria Bartiromo. You are a free thinker. DIG DEEPER!

Nothing Has Changed

Bernanke's bid to inflate the stock market will fail. In the short run, it may stop a freefall, as he is obviously determined to flood the market with liquidity and make anyone sitting in cash feel foolish.
But one man does not a market make, and illusions are just that, illusions.

The election was a positive. Enough fiscal conservatives were elected to the house that someone may actually try to stopped the crazed FRB.

More later...

Tolle On The Economic Downturn

I have repeatedly written that I was against the bailouts, against the stimulus, etc, etc. Perhaps saying I was for letting the downturn be as it was, and is, would have been a better way to phrase it.

This is a non-partisan position. I simply believe that economic downturns serve a purpose in the universe (they are learning tools for this world). They are similar to the tides of the ocean. Business cycles exist for a reason, and fighting them by trying to control them only delays and intensifies the final correction.

This is why I am a proponent of freedom and free markets. I still believe the "capitalism" that so many democrats see as unfair to the poor, isn't capitalism at all. When corporations and financial institutions are bailed out at taxpayer cost with the justification that if they weren't, we simply wouldn't be able to handle the consequences is ego talk.

It is arrogance at its worst. Politicians defend their behavior by saying things like, "I would have voted against the bailout, but I just couldn't let that happen. We would have been thrown in to the next Great Depression and the financial system would have collapsed!" I say...BS. Do they see themselves as more powerful than the laws of the Universe?

Main street will not die without Wall Street. Innovation, entreprenueurship, and invention will survive the next Great Depression. Hardship, though painful, is sometimes necessary to push us forward as human beings. Anyway, it is what it is. We are in a painful economic downturn, let's quit pretending we are not, or the fall will be much more painful in the end.

One of my favorite books in Eckart Tolle's "The Power Of Now". I actually found a clip where Tolle is talking about the economy. I couldn't agree with him more. You will have to browse through the videos at the bottom of the clips to find the one called, "The Current Economy".

http://www.eckharttolletv.com/eckharttolle.com