Friday, July 31, 2015

There Is No Stock Market, Just a Dump for Central Bank Money

I love it.  A company posts earnings that dropped 9.3% over the quarter, BUT...

the stock jumps 11%.

No, there's no stock market bubble here.


kurt9 said...

You see, the stock market has been pumped up over the past 6 years as a result of the carry trade. The money comes from the Federal Reserve, flows through the major banks (who all do "investment banking" services), and ends up in the stock market. This is, coincidentally, why we have not had much price inflation (that 1970's thing) over the past 15 years despite the insane monetary policies since 2000. Its all asset inflation instead.

There will not be a happy ending to this story.

Anonymous said...

Captain, the most important thing that people without economics knowledge need to understand is that:
1. stock represent the assets of the public trade companies
2. the government can print unlimited number of fiat currency
3. the government dilutes the value of the companies by giving companies papers (fiat currency), and taking back what the companies produce - in other words the government steals.

leeholsen said...

the world stock market are a complete joke today and have been for years. we currently have the only way for most compnaies to look better is by share buybacks, almost no one is showing increasing revenue and most are decreasing revenues; yet the united states stock market is still within 5% of its all time high.

i'm sorry but all that matters is the federal bank giving the markets their next shot and i'm even more sorry for those that didnt get rich with this because when the fed is out of shots; you will not be allowed to get rich on the decline; or haven't you noticed what china is doing to sellers and shorters ?

if you are rich now, you need to take it out of the banks and put it into income producing assets. if not, there's nothing else to do but "Enjoy the decline".

Anonymous said...

Hey, at least they MADE money. The major cloud computing companies (Salesforce, Workday, etc.) continue to lose money quarter after quarter, year after year, and continually their stocks rise in price due to increasing revenue.

Bucho said...

I see the link is to a Motley Fool article, so I knew I would have to read through the fluff to get to the "meat" of the article, which, like chicken wings, isn't much.

So in others words, with Football season and hungry fans around the corner, speculators keep speculating.