Friday, July 1, 2011
Wednesday, June 29, 2011
Very, Very Important Information
I told you all that liquidity was in the stock market...or, you could call it inflation.
Apparently, the latest scheme is to buy your own stock to drive the price up...no conflict of interest there...no incentive problems at all...yup.
This article is a must read if you want to understand the markets bounce off the March 2009 lows.
Man, this guy just answered a VERY important question: What was behind this latest stock market rally?
Turns out it was corporate America buying their own stock with borrowed money. (QE 1 & 2 hard at work - cheap govt $) This is fine if your stock isn't overvalued, but if it is (and insiders are not buying, so most of them see their own companies as overvalued!) you are SCREWED when the market corrects.
I had a hunch it was something like that, (because the fundamentals haven't changed & the market increase is not based on REAL growth) but this guy did the work, solved the puzzle, and has provided us all with free, valuable information-what a rare opportunity-take it!
Leverage increases risk, sometimes exponentially. This means the current risk in the stock market is HUGE.
Beware.
Wall Street In Complete Denial
I am amazed as I watch the events in Greece unfold and listen to one talking head after another say how it doesn't matter. They simply cannot accept the fact that economic growth bought with government debt IS NOT SUSTAINABLE.
Greece is going to default. The economic ramifications for Europe are massive.
The U.S. stock market will be affected.
The Wall Street banks simply don't want to believe it because if they do believe it, their solvency, once again, becomes questionable.
Where have we heard this before?
Tuesday, June 28, 2011
Market Up = Nonsensical
When markets are totally irrational...
I short them. (And that doesn't mean you should)
Subscribe to:
Posts (Atom)
Posts
