Wall Street and CNBC: The Stupidest People on Earth (always excluding the "journalists" of the mainstream media)

No, the actual move in stocks today was not that irrational, if you only took the final numbers (and ignored the insane divergence betweent he Dow and the Nasdaq, which I explain below). But the trading today--and you will generally not hear this from the stupid people on CNBC--was very revealing. It almost conclusively shows that all financial markets today are COMPUTER GAMING CASINOS, rather than places for any kind of investment based on economic reality. The financial markets (AND the people in them) are SICK--WORSE than f1929.


Look at what happened today. The Dow was way up (as was the Nasdaq, but more on that later)--well, at least substantially up. Then came the statement from the Fed, which IMMEDIATELY knocked the Dow down 100 points. What did the Fed say that wsa so important? Actually, NOTHING. It is only the Stupidest People on Earth, acting solely as if lplaying a computer game where the rules are artificial, that would have reacted this way to NOTHING.


What the Fed said was that the recession was "easing", although the economy was still weak. Fine. We knew that. It is what the Fed did NOT say that drove the Dow down. The Fed did NOT say that it would PRINT MORE MONEY. In other words, the Fed did not say that it woulld continue this unprecedented, incredible, Wall Street induced purchase by the Fed of OUR OWN DEBT (like you purchasing your OWN MORTGAGE at the time you bought the house). To the economiic fascists on CNBC, and Wall Street, this caused a computer gaming "secret rule" (like a semi-hidden rule in a computer game) to be triggered. If the Fed does not ARTIFICIALLY keep down interest rates, government BORROWING (you have heard about that INCREASING deficit) will DRIVE UP INTEREST RATES. That is bad for the economy. However, is it not true that in a RATIONAL world PRINTING MONEY would drive up interest rates, as would the prospect of FUTURE INFLATION. Damn right.


Yes, this confirms that CNBC, and Wall Street, fully believe what this blog has said: that these enormous deficits, and enormous Federal spending, will SHORT CIRCUIT any recverty. But that did not keep the stock market from rising FORTY PERCENT from its March low (into a BUBBLE--irrational bubble). It gets worse. Yes, the Fed also said that it was no longer worried much about DEFLATION. Whay is that "bad" news for the stock market.


Well, the stock market (one of those "secret" rules of a computer game that you are supposed to figure out, having nothing to do with economic rality) has supposedly gone straight up because of a FALLING DOLLAR, and because of inflationary expectations--thus "explaining" why commmodities (e.g. oil) have gone straight up, as the stock market has gone straight up.


Say what? Am I really telling you that the stupid people on Wall Street, and CNBC, are so stupid as to think it makes rational sense to have MAJOR rises in commodities (anticipating inflation, which causes HIGHTER interest rates) at the same time you have MAJOR rises in the stock market? Yep. Theese are the Sltlupidest People on Earth. You say they are not stupid because they are playing the COMPUTER GAME the way it is now designed to be played? Well, in a way you are right. However, that ignores the more fundamental SICKNESS that ALL YOU HAVE LEFT ARE COMPUTER GAMERSD, ONCE IT BECOMES CLEAR TO EVERYONE ELSE THAT THE MARKETS ARE A COMPUTER GAME WITH RULES HAVING NOTHING TO DO WITH ECONOMIC REALITY.


Is it reallly "bad" news for the economy that the dollar go up? Nope. Not unless the dollar goes WAY up, spoecifically becaluse of major rises in interest rates. But it has been obvious all along that we are headed for MAJOR rises in interest rates the moment any kind of "recovery" is obvious. That is what I have said, and does not today's trading CONFIRM what I have said--at least that Wall Street believes it. The Fed today essentially said that we may be heading into a weak recovery, and that it will not keep ARITIFICIALLY holding down interest rates by prining money. What was the immediate, computer game gype/rule, reaction on Wall Street? It is that interest rates are headed up, and therefore the dollar is headed up. This is all absurd stuff, and indicates again that I am right, and Rush Limbaugh WRONG. Trading on Wall STreet, and in commodity markets (in a price BUBBLE for oil, as this blog has told you) has NOTHING to do with economic reality (even with rational expectations of future economic reality). It is all computer gaming, based on HYPE and these "secret rules" that become the basis for computer trading.


Still doubt me? Never do that. This blog has not made a single substantive mistake--as distinguished from typo type mistake--since the nomination of McCain and Obama. If you doubt the above, consider the other interesting part of stock market trading today. The NASDAQ was incrediblly strong all day. When the Dow was up 80, the NASDAQ was up almost 40. The Nasdaq is trading at less than 1/5 the level of the Dow--meaning it should rise at only 1/5 the gross Dow number, to be proportionate. Then the Dow collpased, but the NASDAQ remained up 25-30. How do you explain that? CNBC won't, or can't (probably both). I can tell you, and I will.


There is actually a bias toward the Nasdaq this year, as the overall market has become more SPECULATIVE, and computer driven. There are also a lot of coomodity stocks on NASDAQ. And the only "hot" areas of the economy (besides financial stocks SUBSIDIZED by the government) have been things like Ipods, and hand held devices of all kinds. This has led to the FAD stocks being mostly on the Nasdaq: stocks like APPLE. That is also where the "growth" stocks (read HYPED FAD STOCKS) are. In a market grown increasingly speculative, the Nasdaq is getting lots of computer gaming play. But that is not all that is going on, and does not really explain TODAY. Can the Nasdaq stocks keep going up if the economy does not "recover". Not on your life. So this is just another irrational part of recent Wall Street trading. However, it gets worse. (Although this helps explain why the economic fascists at IBM--BOYCOTT IBM--are lobbying so heavily for government, central planning business to force a "smarter planet" upon us--government being the only truly growth industry left in the country.)


Have you ever heard of "paired trades". That is another one of those computer gaming stategies of hedge funds, like the "secrets" you find in "how to" manuals on how to play specific computer games. A "paired trade" is where SPECULATIORS "bet" against one investment, while "betting" on another investment. The paired trade here is to be the Nasdaq against the Dow. Sure, you could simply go "long" the Nasdaq, and "short" the Dow. As long as the Nasdq does better than the Dow (even if they both do badly), you will make money. But say you noticed something else. Lately, if the Nasdaq does really well one day, it is likely not to do as well the next. In the previous two days, the Nasdqaq did BADLY--even against the Dow. It was DUE for a rebound. There was some SLIGHT "good" news on Nasdaq stocks today, and it is true that rising interest rates may hurt Nasdaq tech stocks SLIGHTLY less badly than they will hurt industrial and financial stocks. Still, this kind of discrepancy has little to do with reality, and everything to do with PAIRED TRADES. You can generally favor the Nasdaq, if you want, but also bet that the Index that does well for a day or two will do BADLY for the next day or so. Thus, we (not CNBC, or at least they have not told you this much) have seen MANY recent days where the Dow will do BADLY the day after it has done WELL against the Nasdaq, and vice versa--with a general trend in favor of the Nasdaq, but not overwhelmingly so. This PAIRED TRADE COMPUTER GAMING STRATEGY of lplaying the Dow to do badly (comparatively), right after it has done wll, is one of those "secrets" of recent trading. Note how all of this stuff becomes self-fulfilling (as in "self-fulfilling prediction) as computer trading comes to completely dominate trading--because most rational people have left the stock market.


Why does it kill the stock market to have it become a computer gaming casino? After all, people like to gamble. Unfortunately, witht he stock market, what happens is that the swings become ever WILDER, and more irrational, until the market tears itself apart (like that bridge in the Northwet, where the harmonic exaggeration of the swings caused by the winds caused the bridged to tear itself apart).


Do you understand now why these are the Stupidest People on Earth? You should.