The Stupidest People on Earth (Wall Street, Wall Street commentators, and really everyone in our financial system--including commodity traders) continue to get worse.
If you listen to those people you would think that significant things have heappened in the stock market since last October. You may even thinmkk the the rise in oil prices (futures) of some 80-90% off of their recent lows is "singnificant. This blog has told you the real story, and that people who bought oil futures at the top of this "bubble' rise in the price of oil really are the Stupidest People on Earth (matched by the people who assert that such rise is rational, or has anything to do with supply data--supplly basically remaining near a 35 year high in the face of declinining demand).
Yep. What has the S & P 500 done since it first (in recent times) went below 800 in October? Right (if you have been paying attention). It has merely been trading in a range basically between 800 and 900. Yes, it went significantly below 900--for a short while--in early March. But to a large degree that was because the Obama Administration was playing down the economy at that time for political reasons. Since then, the Obama administration has been playing up the economy for political reasons. Meanshile, Wall Street people have been doing what they do best: prove themselves the Stupidet People on Earth.
THREE TIMES the stupid people on Wall Street (now computer gamers all) have driven the S & P 500 above 900. In other words, the sick people (who have created a sick system) on Wall Street have basically created three "bear markets" since October, and three "bull markets". Back when Wall Street was not quite so sick, "bear" markets and "bull" markets lasted for YEARS.
Right before Obama was elected (up to election day), the stock market bounced violently off of its October lows--by "old" definitioins approximating a "bull market". Once Obama was elected (the economy remaining the same, or getting worse, as was obvious while the Stupidest People on Earth were driving the stock market up on computer trading), the stock market went straight down. We then reached a new LOW (for recent times) on November 20. The stock market then proceeded to go straight up again--reaching a new post-October high in January--again without much change in economic prospects.
Then Obama took office. the stock market went straight down again, to each that new low about March 9. In the meantime Obama had took office, and Rush Limbaugh (ignoring my advice that he was being an idiot) suggested that wall Street was voting thumbs down on Obama. These people are not nearly smart enough for that. It was all computer trading, helped along by the politically motivated pessimism of the beginning of the Obama Administration (a calculated pessimism designed to get Obama's programs passed and convicne everyone how bad the Bush Adminstration had left the country).
Since March 9, the Stupidest People on Earth have again driven the stock market into a "bull market" (by old definitions), up as much as 30%. Yet, where are we? Right. We are back at the same level representing the approximate top of the recent range. Yes, today the S & P 500 has again fallen below 900. Over this entire period, the economy has hardly changed, while the Stupidest People on Earth have gyrated the stock market wildly--in blatant computer manipulation. Nor have the PROSPECTS for the economy changed much--as far as visibility is concerned. Yes, you can say taht Armageddon has not happened, and that all of this government spending has "stabilized" some areas of the economy--at a cost of DERAILING any incipient recovery as soon as it starts. But there is no indication that any strong "recovery" is in the offing.
The GM bankruptcy is still ahead of us, as Obama proceeds with "green" plans to destroy anything that might be left of the auto industry--not to menation other "non-green" industries. Unemployment is guaranteed to continue to rise for some time. States are raising taxes, and asking for bailouts. They may finally be forced to actually lay off people-0government having been the only growth industry around. The Federal Government is in the process of raising taxes (the Bush tax cuts "expire" next year, and you have all of these other "sneaky" taxes being raised).
Was there any excuse for the stock market to go up 30%? Nope. Oh, you could see it going up 5 or 10%, but 30% merely shows that the Stupidest People on Earth have been at work.
It gets worse. As this blog has shwon you, oil prices and the stock market CANNOT go up together--in a logical world and in this kind of weak economy. All That does is DESTROY any recovery--resulting in LOWER oil prices (bursting of the present bubble in oil futures). For oil prices to rise 80-90%, while the stock market rises 30%, is INSANE. Yep. you could see oil prices stabilizing, and drifting slightly upward, on the economy "stabilizing" (for now). But you could argue a thousand years and not adequately explain the logic of a new "bull market" in oil while the economy is still this weak, and oil demand still falling (while supply has risen).
Could you not have "made money" since October? Sure you could have, IF you are a "riverboat gambler" (which I am--just not a very good one). You could allso have LOST moeney--a lot of it. If you bought near the top of these irrational rises in the stock market, you would have lost money THREE TIMES--a lot of money (coutning the initial big drop in October, where there were some irrational up days based on the Paulson "bailout" legislatoin). Yes, you could have made money three times, but ONLY by buying near the bottom. So who are th Stupidest People on Earth who bought near the top of these irrational rises? It is all a game of computer musical chairs, having nothing (or almost nothing) to do with economic reality). NO healthy markets should move this irrationally. As I have said, the stock market is as unhealthy today as it was in 1929, and speculation is just as rampant. In fact, the financial markets these days are nothing but speculationi. What do you think "derivatives" were? And computers (lol) were supposed to enable financial people to handle new financial instruments like derivatives, which would be too dangerous without computer technology. If you ever think the people in our financial markets are SMART, you might read that last sentence again, and then remember what happened between October of 2007 (when the stock market was irrationally high) and October of 2008.
This is why I have said--correctly--that sports bettors are more rational than Wall Street people (and there are few more irrational people on Earth than sports bettors). At least sports bettors LEARN, and trends are quickly destroyed. Does the home team always "cover the spread" when it is playing a team playing its second staright game on the road? Well, sports bettors will LEARN , and destroy that trend by betting on it--adjusting the "spread" so that the trend no longer works. It is only Wall Street people--the Stupidest People on Earth--who do not learn sufficiently to destroy trends, or keep from committing the same conduct over and over again (such as the new "bubble' in the price of oil).
Example. Since 1994 (basically 15 years), and maybe even before that, there has ALWAYS been a HUGE drop in the stock market in the late summter (late July, August, September, and extending sometimes into October). There is even a maxim: "Sell in May, and walk away". What would sports bettors do. they would start playing this trend. They would start selling in early May and April--ahead of the expected "trend" selling. The Stupidest Peoiple on Earth do not do this. In fact, there has often been a RALLY in Maym June, and July, despite this obvious historical trend.
Yes, it is built into the computers of the Stupidst People on Earth that we will have a sickening drop in the stock market in late summer. But how can people PUSH the stock market to ridiculous heights, when they KNOW what they have built into their computers for the late summer? The only explanation is that these are the Stupidest People on Earth, who trade totally on PRESENT HYPE (not actual economic prospects for the future)--basically running a computer gaming casino which is almost totally independent of the economy and logic (excepting only when events occur which cannot be ignored, such as the severe recession that resulted in establishing the new "trading range" after the decline between October of 2007 and October of 2008--note that the big drop again occurred in the September time frame).
In short, if you buy sstocks (except as part of a long-term strategy, which is no longer of interest to most on Wall Street--speculators all) at the TOP of these fictional rallies (buy high and sell low), you are one of the Stupidest People on Earth. That is especially true as we head for July, August, September and October. You can often get away with buyin LOW in those months. Since at least 1994, buying HIGH in the summer has been FATAL.
As with mainstream "journalism", I will keep repeating myself regarding the Stupidest People on Earth, because they keep repeating themselves. If they stop, I will